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NCDEX launches Chennai rainfall futures, expanding India's weather derivatives market

The National Commodity and Derivatives Exchange (NCDEX) has launched rainfall futures for Chennai, following its existing Mumbai contract. The new instrument, approved by SEBI, allows participants to hedge against deviations in monsoon rainfall using IMD data. Contracts expiring from September to December are available initially.

By Tertius News AI Desk 2 distinct · 2 mastheads · 2 articles Version 1 Coverage Aug 31, 2026 Published 1h ago

The National Commodity and Derivatives Exchange (NCDEX) has launched a rainfall futures contract for Chennai, expanding its weather derivatives offering beyond Mumbai. The contract, named RAINCHNNAI, went live on Monday, August 31, and has received approval from the Securities and Exchange Board of India (SEBI), as reported by Business Today and CNBC TV18.

Contract details

The contract covers the months September through December, a period when the Northeast Monsoon accounts for nearly 70% of Chennai's annual rainfall, according to CNBC TV18. It is cash-settled, meaning no physical delivery of rain occurs; instead, payouts are determined by weather observations.

The underlying measure is the cumulative deviation rainfall (CDR) — the difference between actual rainfall and a benchmark. NCDEX uses a long-period average calculated from the past 50 years of rainfall data, as reported by CNBC TV18. The exchange said the methodology was developed in collaboration with IIT Bombay.

Rainfall data is sourced from India Meteorological Department (IMD) stations at Meenambakkam and Nungambakkam, according to both outlets. The contract has a tick size of 1 millimetre and a lot multiplier of ₹50 per mm, as reported by CNBC TV18. The minimum initial margin is 10% and the maximum order size is 50 lots.

The final settlement price will be based on the CDR spot value on the expiry day, and the last trading day will be the business day immediately preceding the final calendar day of the contract month, as per CNBC TV18. Trading hours run from 10 am to 11:55 pm, according to the same report.

How rainfall futures work

Rainfall futures are financial instruments designed to help businesses manage risks arising from unexpected weather. Unlike insurance, payouts do not depend on proving that a specific weather event caused a specific loss. Instead, the contract value changes based on how much actual rainfall deviates from the benchmark. A participant whose business is financially exposed to such deviations can take a futures position to offset some of the risk.

Businesses whose revenues or costs are sensitive to rainfall — such as farmers, farmer producer organisations, and agricultural enterprises — could potentially use these contracts to hedge their exposure, as explained by Business Today.

Existing Mumbai contract

NCDEX already offers a similar rainfall futures contract for Mumbai, called RAINMUMBAI. That contract is based on Monsoon Cumulative Deviation Rainfall (CDR), measuring deviation from a 30-year historical average, according to Business Today. It uses IMD rainfall observations at Mumbai's Santacruz and Colaba stations.

The contracts do not predict future weather and are intended primarily for risk management rather than forecasting, as noted by Business Today.

Both outlets reported that retail investors can trade the futures.

How each outlet told it

A framing line is our reading of that outlet's own text — an interpretation, not a quotation and not a fact we assert. Check it against what the outlet published.

Business Today

Framing: Announces the launch of Chennai rainfall futures by NCDEX and frames it as expanding India’s weather derivatives market — Informative and neutral

as of Aug 31, 2026, 10:19 AM UTC

Facts Included:

NCDEX will launch futures contracts linked to Chennai rainfall from Monday
The exchange has received approval from Sebi for the new contracts
Contracts expiring in September, October, November and December will initially be available
The Chennai rainfall futures will be cash-settled and will attract a concentration margin
The open interest threshold has been set at 116,400 millimetres
NCDEX already offers rainfall-linked futures for Mumbai under its RAINMUMBAI contract
The Mumbai contract is based on Monsoon Cumulative Deviation Rainfall (CDR)
Data is sourced from IMD rainfall observations at Mumbai’s Santacruz and Colaba stations
Retail investors will also be able to trade the futures

Read the source article →

CNBC TV18

Framing: Announces the launch of the rainfall futures contract and its purpose of helping businesses hedge monsoon-related risks.

as of Aug 31, 2026, 1:17 PM UTC

Facts Included:

The National Commodity and Derivatives Exchange (NCDEX) has launched a rainfall-based futures contract for Chennai, giving businesses and other market participants a way to hedge their financial exposure to unusually high or low rainfall during the Northeast Monsoon.
The contract, called RAINCHNNAI, was launched on Monday, August 31.
It covers September to December, a period when the Northeast Monsoon accounts for nearly 70% of Chennai's annual rainfall.
The contract is settled according to observed rainfall recorded by India Meteorological Department (IMD) stations at Meenambakkam and Nungambakkam.
RAINCHNNAI tracks cumulative deviation rainfall (CDR) using a long-period average (LPA) from the past 50 years.
The contract has a tick size of 1 millimetre and a lot multiplier of ₹50 per mm.
The minimum initial margin is 10%, while the maximum order size is 50 lots.
The final settlement price will be determined using the CDR spot value on the expiry day.
The last trading day will be the business day immediately preceding the final calendar day of the relevant contract month.
Earlier this year, the exchange launched RAINMUMBAI, aimed at managing rainfall risk associated with the Southwest Monsoon.
NCDEX said the methodology behind RAINCHNNAI was developed in collaboration with IIT Bombay.

Read the source article →

What was claimed, and who backed it

AI-extracted; can misattribute a claim — see Methodology.

Each row is one claim, attributed to the outlet whose wording states it most clearly. Confidence rates how directly the source text states the claim — explicit and unhedged rates high; hedged, pieced-together, or internally inconsistent statements rate lower. It does not measure whether the claim is true. Status is Contested when two claims on this page negate each other; otherwise it counts the distinct outlets we found asserting that specific claim — so a single-source claim can still show high confidence, and a multi-source claim can show medium. Every one of those outlets is named beside the status, so you can check the count against the list. For claims extracted before we began storing that list, the row says so: it names the outlet the claim is quoted from and states that we have not recorded which outlets backed it. Outlets wrote at different times, so a figure that evolves — a casualty count, for example — can legitimately differ between rows; check the "as of" time next to each claim's source.

Claim	Confidence	Status
ClaimThe exchange has received approval from the Securities and Exchange Board of India (SEBI) for the Chennai rainfall futures.	ConfidenceMedium	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC
ClaimThe contract covers the months September, October, November, and December.	ConfidenceHigh	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC
ClaimThe contract is cash-settled.	ConfidenceHigh	StatusMulti-source (2 outlets · 2 distinct) via Business Today as of Aug 31, 2026, 10:19 AM UTC, CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe contract tracks cumulative deviation rainfall (CDR) using a long-period average (LPA) of rainfall data from the past 50 years.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe rainfall data is sourced from IMD stations at Chennai's Santacruz and Nungambakkam.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe contract has a tick size of 1 millimetre and a lot multiplier of ₹50 per mm.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe minimum initial margin is 10% and the maximum order size is 50 lots.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe final settlement price will be determined using the CDR spot value on the expiry day.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe last trading day will be the business day immediately preceding the final calendar day of the contract month.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimTrading hours are from 10 am to 11:55 pm.	ConfidenceHigh	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC
ClaimNCDEX already offers a rainfall futures contract for Mumbai called RAINMUMBAI.	ConfidenceHigh	StatusMulti-source (2 outlets · 2 distinct) via Business Today as of Aug 31, 2026, 10:19 AM UTC, CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimThe Mumbai contract is based on Monsoon Cumulative Deviation Rainfall (CDR).	ConfidenceMedium	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC
ClaimThe Mumbai contract uses IMD rainfall observations at Colaba and Santacruz stations.	ConfidenceMedium	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC
ClaimThe Chennai contract uses IMD stations at Meenambakkam and Nungambakkam.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimNCDEX said the methodology for the Chennai contract was developed in collaboration with IIT Bombay.	ConfidenceHigh	StatusSingle-source via CNBC TV18 as of Aug 31, 2026, 1:17 PM UTC
ClaimRetail investors can trade the futures.	ConfidenceHigh	StatusSingle-source via Business Today as of Aug 31, 2026, 10:19 AM UTC

Transparency & Audit Trail

2 distinct · 2 mastheads · 2 articles consulted: Business Today, CNBC TV18 16 claims extracted Version 1 Written 2026-08-31