MCX to launch futures trading in Kurfi Jyoti potato
MCX is set to launch futures trading in the superior quality Kufri Jyoti potato. This will be in addition to the fair average quality potato - Agra-3797, on which it is already conducting futures trading since March, this year.
By Ratna Ganguli, TNN |
KOLKATA:The Multi-Commodity Exchange of India (MCX) is set to launch futures trading in the superior quality Kufri Jyoti potato. This will be in addition to the fair average quality potato — Agra-3797, on which it is already conducting futures trading since March, this year.
If everything goes well, futures trading on the Kufri Jyoti variety is expected to be launched by the exchange by August-end, which would be due for delivery during November-December, ‘06 and January ‘07. The new launch will help potato growers in the eastern region and particularly West Bengal, which is one of the largest producers of this variety of potato in the country.
This will complement MCX’s current futures contracts on the Agra variety of potato, said Jignesh Shah, CEO & MD of MCX. Since its launch, MCX has recorded an aggregate volume of Rs 3,607 crore on a single side trading in the Agra variety, till July 24, ‘06, an exchange official said.
The initial contracts will be offered for Kufri Jyoti, ex-West Bengal, where its spot market size is estimated at Rs 4,500 crore a year. Bulk of the transactions in this market is made through cold storage. The state, which produces about 80 lakh tonnes of potato annually, has so far 600 cold storages to exclusively preserve potato.
MCX will select some of those cold storages for its delivery on the maturity of future contracts. For this, it is now negotiating with several cold storage owners in the potato growing districts in the Howrah, Hooghly and Burdwan districts in the state. Once selected, these cold storage will be operated by MCX’s subsidiary, National Bulk Handling Corporation to maintain quality in every aspect, the official said.
However, a section of local traders believe that since FMC has mandated compulsory delivery of the Kufri Jyoti potato, the launch of its futures trading in August may create some problems in adhering to the mandate. With half of the current season over, problems may arise in making potato delivery during November-December, ‘06, when the first contract expires.
If everything goes well, futures trading on the Kufri Jyoti variety is expected to be launched by the exchange by August-end, which would be due for delivery during November-December, ‘06 and January ‘07. The new launch will help potato growers in the eastern region and particularly West Bengal, which is one of the largest producers of this variety of potato in the country.
This will complement MCX’s current futures contracts on the Agra variety of potato, said Jignesh Shah, CEO & MD of MCX. Since its launch, MCX has recorded an aggregate volume of Rs 3,607 crore on a single side trading in the Agra variety, till July 24, ‘06, an exchange official said.
The initial contracts will be offered for Kufri Jyoti, ex-West Bengal, where its spot market size is estimated at Rs 4,500 crore a year. Bulk of the transactions in this market is made through cold storage. The state, which produces about 80 lakh tonnes of potato annually, has so far 600 cold storages to exclusively preserve potato.
MCX will select some of those cold storages for its delivery on the maturity of future contracts. For this, it is now negotiating with several cold storage owners in the potato growing districts in the Howrah, Hooghly and Burdwan districts in the state. Once selected, these cold storage will be operated by MCX’s subsidiary, National Bulk Handling Corporation to maintain quality in every aspect, the official said.
However, a section of local traders believe that since FMC has mandated compulsory delivery of the Kufri Jyoti potato, the launch of its futures trading in August may create some problems in adhering to the mandate. With half of the current season over, problems may arise in making potato delivery during November-December, ‘06, when the first contract expires.
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