MCX simplifies cotton delivery procedures
The change, according to trade sources, would standardize deposit of cotton in exchange registered warehouses
The Multi Commodity Exchange (MCX), India’s largest commodity derivatives trading platform, has simplified cotton delivery procedures.
Instead of optional deposit of cotton in the exchange accredited warehouses in which depositor could have the option to chose between demat deposit or warehouse receipt earlier, MCX has made compulsory demat of all deposits.
Further, the exchange has strengthened packaging norms of cotton bales from 110 grams / yard earlier to 140-150 grams / yard white twill cotton cloth (woven cloth) and adequate spiral bands now, as per standard industry practice.
The change, according to trade sources, would standardize deposit of cotton in exchange registered warehouses.
The exchange made mandatory intimating its warehouse keeps two days in advance of physical transportation of goods to keep ready the necessary arrangements such as storage, grading and sampling. Based on the intimation received from the depositor, delivery acceptance schedule will be intimated by the warehouse supervisor. Loading and unloading of bales will be undertaken on first-cum-first-serve basis. Similar time schedule and process shall be followed at the time of lifting the goods from the warehouse.
“Being the first year in 2011, the exchange had linked cotton trade with physical markets. This year, however, norms are made more traders friendly,” said an exchange official.
Deliveries on the exchange platform are accepted only in electronic / dematerialized form. For holding commodity in electronic form, members and their respective constituents have to open a demat account with the empanelled depository participant (DP) of the exchange in both depositories i.e. National Securities Depositories Ltd (NSDL) and Central Depository Services Ltd (CDSL).
The exchange has appointed National Bulk Handling Corporation (NBHC) as approved assayer for sampling, testing and issue of quality certificates which would charge Rs 1800 per sample lot of 100 bales (delivery unit) for sampling and analysis.