Multi Commodity exchange of India Ltd. (MCX), India's leading commodity exchange, has introduced futures contract in cotton in view of the anticipated bumper cotton harvest this season.
Initially, the exchange is offering three futures trading contracts due for delivery in October, December and January.
Mr. Ramesh Abhishek, Chairman of the Forward Markets Commission (FMC), the commodity markets regulator, said India is a leading producer and exporter of cotton, and hence the futures contract for the commodity would meet the requirements of the entire cotton value chain.
Trading for futures contracts is allowed in multiples of 25 bales of 170 kg each, based on ex-warehouse Rajkot, Gujarat price, exclusive of taxes, with Rajkot being the main delivery centre.
MCX further informed that the delivery of commodity is obligatory for cotton contracts and physical delivery is allowed in multiples of 100 bales. Traders are allowed to trade a maximum of 1,200 bales per contract.
An individual broker is authorised to trade up to 150,000 bales for his clients, while an individual trader is allowed to trade at the most 50,000 bales on the MCX platform, the exchange informed.
India, the second most leading cotton producer across the globe, harvested 33.42 million bales of cotton during the 2010-11 season that ended last month. The country produced 24.02 million cotton bales during the previous season.
Besides MCX, cotton contracts in the country are already being offered by NCDEX and NMCE commodity exchanges.
Headquartered in Mumbai, MCX is a state-of-the-art electronic commodity futures exchange and has permanent recognition from the Government of India to facilitate online trading, and clearing and settlement operations for commodity futures across the country.
Fibre2fashion News Desk - India
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