MCX Current Affairs

Cotton Mission: Maharashtra Government signs MoU with MCX to empower cotton farmers

Maharashtra Government has singed MoU with India’s largest commodities exchange platform, Multi Commodity Exchange of India Limited (MCX) to launched Cotton Mission to empower cotton farmers in the state. The mission aims to create value chain with final market linkages for thousands of cotton farmers in Vidarbha region of the state.

Cotton Mission

Under this mission,  MCX will partner with state agriculture department and other agencies to work closely with Farmer Producer Organisations and help them connect to its organised market network for building their capabilities. It will work with State Government to identify and create farmer groups and work towards equipping these groups to access regulated markets. This will enable farmer to participate in transparent price discovery mechanism and sell their produce in national market for better price realization. This in long term will support the farmers’ in their upliftment and contribute to doubling their incomes by 2022, as envisaged by the centre.

Background

MCX already has accredited warehouses in Yavatmal and Jalna in Vidharba region and it is planning to provide delivery facilities in three or more new locations under mission. Its cotton futures market provides efficient platform for farmers to move up value chain and increase their price realisations. It also allows farmers to use its mechanism to deliver or hedge to get remunerative prices.

Multi Commodity Exchange (MCX)

MCX is country’s first listed commodity futures exchange that facilitates online trading, and clearing and settlement of commodity futures transactions, thereby providing platform for risk management. It was launched in November 2003 and operates within regulatory framework of Forward Contracts Regulation Act, 1952 (FCRA, 1952) under SEBI. MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others). Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and gold in futures trading.

Month: Categories: States Current Affairs - 2018

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MCX launches India’s first copper options contracts

India’s largest commodities exchange platform, Multi Commodity Exchange of India Limited (MCX) launched country’s first copper options contracts. The option contract will provide physical market participants additional instrument to hedge their price risk. The copper option contracts were launched with lot size of 1 tonne in three contracts expiring in June, August and November 2018.

Background

Copper is third-most-consumed industrial metal in the world, after iron and aluminium. In last few years, world’s refined copper usage has surged, owing to growing demand in sectors like electrical and electronic products, industrial machinery and equipment, building construction, transportation equipment and consumer and general products. Copper ore production in India stood at 3,846 thousand tonnes in 2016-17 and its consumption demand for refined copper was 820 thousand tonnes in the FY16.

Options

Options are an instrument that gives buyer right to buy or sell an underlined at present price on a future date. They are of two types: puts (right to sell) and calls (right to buy). According to market experts, options are also a much better hedging instrument as compared to futures for hedgers.

Significance of copper options contracts

It will provide optimal tool for stakeholders to hedge and mitigate price risk in copper. It gives copper industry greater flexibility with alternative opportunities to take on price risk. It will help corporates to do better budgeting exercise as premiums will be known. This will help us to procure material at prices that have been envisaged specially in situations like tender or open orders. It will also complement current futures contracts on MCX and  bring greater vibrancy to metals market and give stakeholders opportunity to better manage their price risk.

Multi Commodity Exchange (MCX)

MCX is country’s first listed commodity futures exchange that facilitates online trading, and clearing and settlement of commodity futures transactions, thereby providing platform for risk management. It was launched in November 2003 and operates within regulatory framework of Forward Contracts Regulation Act, 1952 (FCRA, 1952) under SEBI. MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others). Globally, MCX ranks no. 1 in silver, no. 2 in natural gas, no. 3 in crude oil and gold in futures trading.

Month: Categories: Business & Economy Current Affairs 2018

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