MCX hikes cardamom futures trading margin by 10 per cent

NEW DELHI: Leading commodity bourse MCX has increased the amount (margin) investors need to deposit for trading in cardamom futures by 10 per cent.

With this hike, effective from May 10, buyers need to deposit 17.06 per cent of the value of cardamom they intend to take in. Earlier, the margin was only 7.06 per cent.

"As a risk management measure, the exchange has decided to levy a special margin of 10 per cent on buy side in cardamom contracts," MCX said in a circular.

The extra margin is applicable to both commodity brokers as well as individual traders, it said.

"Margin is increased on buyers to curb excessive volatility in cardamom prices which have risen by 15 per cent in last one week on higher domestic and global demand amid poor supply of the commodity," commodity brokerage firm Karvy Comtrade's analyst Veeresh Hiremath said.

Cardamom futures prices have touched the peak of Rs 1,565 per kg from a low of Rs 1,358.40 per kg in last four trading sessions, he said.

Production of cardamom, which is largely grown in Kerala, is expected to be down by 15 per cent this year. Last year, as much as 95,000 tonnes of cardamom was produced in the country, according to trade data.

Meanwhile, spot price also stood firm at Rs 1,200 per kg at Vandanmedu in Iduki district of Kerala, which is the country's largest physical market for cardamom.