MCX launches Kapas April 2008 contract

Mumbai, Aug 23 (UNI) In a bid to emulate the success of its Kapas April 2007 contract, India's leading commodity bourse Multi Commodity Exchange (MCX) has launched Kapas April 2008 contract for trading on August 16 which will expire on April 30, 2008.

Since its launch, the contract has witnessed an average daily turnover (single sided) of Rs 22.78 crore and average daily volume of 10,644 MT.

No changes have been made in the contract specifications, the variety of ''kapas'' being fair average Kalyan cotton of Gujarat 13 variety and/or V 797, which can be either hand or machine made. The minimum lot size is 4 MT and the unit of price quotation is in rupees per 20 kg ex-Surendranagar, exclusive of all taxes, levies, sales tax/VAT. The tick size is 10 paise and the delivery centres are Kadi, Viramgham, Lakhtar, Limdi, Surendranagar and Bawla in Gujarat.

The unique feature of ''kapas'' is that it is a ''bandhani'' contract that protects market participants from exposure to unlimited losses under extreme volatile market scenarios. It enables the market participants to know their maximum possible profits or losses at any given point in time during the lifetime of the contract.

During 2006-07, futures trading in the ''kapas'' contract received overwhelming response and participation from the industry due to its inherent advantages like price risk management (hedging) against highly volatile cotton prices and effective price discovery, MCX deputy managing director Jospeh Massey said.

UNI