MCX launches future trading in kapas
Multi-Commodity Exchange of India (MCX) has launched futures trading in kapas (raw cotton or seed cotton) for April 2007 contracts.
By TNN |
KOLKATA: Multi-Commodity Exchange of India (MCX) has launched futures trading in kapas (raw cotton or seed cotton) for April 2007 contracts. Trading will be offered for the fair average quality of `Kalyan’ and V-797 varieties of kapas, produced largely in Gujarat.
Complying with guidelines of the Forward Markets Commission (FMC), the margin on its futures trading has been initially fixed at 4% of the total transaction. The contract size for each variety is pegged at 4 tonnes while delivery will be made from six places in Gujarat, including
Kadi, Viramgam, Lakhtar, Limbdi, Surendranagar and Bawla.
Futures trading in kapas is likely to give an effective tool to farmers and traders to hedge their price risk. Majority of traders were awaiting this contract. As a result, the exchange has received huge response from traders in taking position in this counter, said Mr Jignesh Shah, CEO and managing director, MCX.
In cases of sharp volatility in this counter, special margin would be imposed on both the `buy’ and `sale’ side of the trading, said Mr Shah.
Important kapas trading centres in the country are Abohar (Punjab), Sirsa
(Haryana), Sri Ganganagar (Rajasthan), Kadi, Rajkot and Surendranagar (Gujarat), Sendhwa (Mahdya Pradesh), Jalgaon, Akola and Yavalmal (Maharashtra) and Guntur, Adilabad (Andhra Pradesh).
India, the world’s third-largest cotton producer and has the largest area
under cotton cultivation. The country has produced 244 lakh bales (each of 170 kg) of cotton in 2005-06.
Complying with guidelines of the Forward Markets Commission (FMC), the margin on its futures trading has been initially fixed at 4% of the total transaction. The contract size for each variety is pegged at 4 tonnes while delivery will be made from six places in Gujarat, including
Kadi, Viramgam, Lakhtar, Limbdi, Surendranagar and Bawla.
Futures trading in kapas is likely to give an effective tool to farmers and traders to hedge their price risk. Majority of traders were awaiting this contract. As a result, the exchange has received huge response from traders in taking position in this counter, said Mr Jignesh Shah, CEO and managing director, MCX.
In cases of sharp volatility in this counter, special margin would be imposed on both the `buy’ and `sale’ side of the trading, said Mr Shah.
Important kapas trading centres in the country are Abohar (Punjab), Sirsa
(Haryana), Sri Ganganagar (Rajasthan), Kadi, Rajkot and Surendranagar (Gujarat), Sendhwa (Mahdya Pradesh), Jalgaon, Akola and Yavalmal (Maharashtra) and Guntur, Adilabad (Andhra Pradesh).
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India, the world’s third-largest cotton producer and has the largest area
under cotton cultivation. The country has produced 244 lakh bales (each of 170 kg) of cotton in 2005-06.
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