MCX starts trading in cotton futures

The Multi Commodity Exchange of India (MCX) has launched trading in medium staple and long staple cotton futures on July 29, 2004.

The trading will be available in November 2004 contract. Subsequently contracts with later expiry will commence.

These multiple contracts would provide an opportunity to manage risks for hedgers as well as unleash an opportunity for speculators to capitalise on the inherent volatility in the sector.

"Our main aim in choosing medium and long staple cotton futures is to provide a hedging facility for price volatility in cotton trading," Jignesh Shah, managing director of MCX said.

The MCX started trading in unginned cotton (Kapas) and it is expected that during the current cotton season, it will have reasonable liquidity in both unginned cotton and staple based cotton contracts.

"An active cotton contract would bring the producers and the consumers both to the exchanges due to its efficient pricing," Joseph Massey, deputy managing director of MCX said.