MCX commences trading in Kapas April 2007 contract

By Staff
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Google Oneindia News

Mumbai, Aug 31 (UNI) For the third successive year, MCX (Multi Commodity Exchange of India) has launched futures trading in Kapas (known as raw-cotton or seed cotton) April 2007 contract.

The Bandhani price (floor limits for the life of the contract) is available for futures trading. Variety of Kapas permitted as per the contract specification is a fair average Kalyan cotton of Gujarat 13 variety and/or V-797 variety.

Whenever, the daily price limit is hit, the daily price limit would be relaxed up to 6 per cent, as per the direction of forward markets commission (FMC).

Mr. Jignesh Shah, MD&CEO of MCX, told UNI, ''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 and the exchange has initially received widespread participation from major cotton trading centres.'' Daily price limit is 3 per cent and initial margin is 4 per cent. Tick size is 10 paise. In case of additional volatility, a special margin at such percentage, as deemed fit, would be imposed immediately on both buy and sale side.

Trading and delivery unit is 4 tonne (200 maund). Delivery centre is within 50 km of the municipal limits of Kadi, Viramgam, Lakhtar, Limbdi, Sunrendranagar and Bawla.

Important Kapas trading centres in the country are Abohar (Punjab), Sirsa (Haryana), Sri Ganganagar (Rajasthan), Kadi, Rajkot and Surendranagar of Gujarat, Sendhwa in Mahdya Pradesh, Jalgaon, Akola and Yavalmal in Maharashtra, Guntur, Adilabad in Andhra Pradesh.

UNI AR WD SKB1937

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