The Hindu Business Line : MCX’s focus on agri commodities paying off

Mumbai, Aug. 14 The emphasis by Multi Commodity Exchange of India Ltd (MCX) on increasing trading volumes in agriculture commodities seems to be bearing fruit if the recently launched wheat and guarseed contracts are anything to go by.

The exchange recently amended the quality specifications for wheat contracts to allow four per cent shrunken, shrivelled and broken against the three per cent allowed earlier.

Further, a five to six per cent of shrunken, shrivelled and broken are accepted for delivery at a discount.

AVERAGE TURNOVER

“The recent amendment has facilitated the participation of physical market players in a big way to trade and hedge their price risk. The exchange records an average daily turnover of about 10,000 tonnes in wheat,” said an analyst.

Additional delivery centres for wheat have been set up at Khanna, Karnal, Kanpur, Kota, Indore, Hardoi, Bareilly, Gonda, Benares and Mathura.

HEALTHY GROWTH

Mr Lamon Rutten, Managing Director, said: “The exchange will continue to build on its strengths in agriculture commodities.

The exchange has witnessed broad-based participation and healthy growth in volumes in agriculture products which were recently launched.”

Good participation from investors in Delhi and Uttar Pradesh, the two largest trading centres for wheat, pushed up trading volumes.

With the monsoon playing truant, the uncertainty in agriculture commodity prices has attracted hedgers to consider the platform, said a trader.

With the Government holding an inventory of about 33 million tonnes of wheat and supplies with the traditional sources fast drying up, millers are taking positions in the exchange to source their requirements before the next crop arrives in March 2010, he added.

The exchange’s agriculture commodities turnover jumped 71 per cent in July to Rs 6,010 crore against Rs 3,509 crore in the same period last year. Up to August 11, its agriculture commodities turnover was at Rs 3,200 crore, almost equal to the turnover of Rs 3,253 crore recorded in the whole of August 2008.

The recently launched guarseed contracts recorded the highest turnover of Rs 108 crore on Tuesday (August 4), a big jump from the Rs 49.52 crore clocked on the day of its launch on July 27. It records an average daily turnover of Rs 60 crore in guar.

In the recently launched guar contracts, the exchange witnessed highest turnover of Rs 108 crore on August 4 as compared to Rs 50 crore clocked on the first day of its launch on July 27. It records an average daily turnover of Rs 60 crore in guar.

The exchange registers an average daily turnover of Rs 90 crore in Mentha, Rs 80 crore in crude palm oil and Rs 70 crore in refined soya oil.

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