New Delhi, Jun 7 (PTI) With southwest monsoon just around the corner, the country's leading agri-commodity bourse NCDEX on Sunday said it has developed rainfall index, a tool to track the progress of monsoon.

After taking feedback from market stakeholders, the exchange will launch the rainfall index for trading as a derivative instrument, it said.

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Both farmers and commodity traders can take positions on this index as the instrument can be used as a hedge against excess or deficient rains.

"I think a rainfall index is an easier one to try and may be more relevant to look at and start publishing. After we get more feedback, we will look at other weather parameters," NCDEX Managing Director and CEO Vijay Kumar told PTI in an interview.

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The design of the rainfall index is nearing completion, he said.

"After we publish, we will interact with participants and get the feedback in terms of how people want to use it and what benefit they see and what applications they have. Then we design the product for trading," he added.

Kumar said the exchange will just provide rainfall data on the index initially. It will be for reference alone and not a tradable instrument.

The rainfall index, in fact, is a precursor to a weather derivative that would be launched subsequently from the NCDEX platform.

Last month, NCDEX had launched 'Agridex' that tracks and replicates the performance of the ten most liquid commodities traded on the NCDEX platform.

There has been active trade in Agridex right from the day one and more institutional players have shown interest in this product, he added

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