KOCHI: Multi-Commodity Exchange of India Ltd. (MCX) has announced the launch of cardamom futures. With this, traders will be able to check prices at auction centres and the MCX and decide where to sell.

Jignesh Shah, managing director of MCX, says this launch will provide a reliable, transparent and efficient price risk management tool for cardamom growers, traders and exporters.

The objective of futures launch is to achieve economies of scale and face challenges thrown up by opening up of global market, he adds. The grade specified for trading in MCX is cardamom 7 mm and above, with a litre weight of 400 grams and above. The trading unit for cardamom contracts is specified at 100 kg (one quintal). The price quotation will be ex-Vandanmedu, of Idukki district. The ticket size of the contract is 10 paise a kg, with a daily price limit of five per cent.

Trading in a contract month will open on day 16th and run for five months. Each contract will expire on the 15th day of the contract month.

There will be an initial margin of seven per cent. Delivery will be in lots of 100 kg at exchange-approved Kerala State Warehousing Corporation's specialised warehouse located at Vandanmedu. This is the main cardamom growing and trading centre in Kerala and has the best climatic conditions suited for efficient storage of cardamom.

The total annual production of cardamom in the country is 14,000 tonnes, which arrives from August to May. The main cardamom varieties are Alleppey green extra bold 7 mm and above and green bold 6 mm (AGB).

About 90 per cent of the produce is consumed within the country, while the remaining is exported, with Saudi Arabia and Japan being the major importers.

The MCX, an independent, multi-commodity exchange recognised by the Union Government, provides state-of-the-art online trading, clearing and settlements to Indian commodity futures markets. Key shareholders include Financial Technologies Ltd., National Stock Exchange, the National Bank of Agriculture and Rural Development, the State Bank of India (SBI) and Union Bank of India.

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