Handicraft corp hedges on MCX

State-run unit plans to hedge Rs 100 crore in precious metals

Handicrafts & Handlooms Exports Corporation of India (HHEC), a PSU under the Ministry of Textiles, has started hedging in bullion metals at the Multi Commodity Exchange (MCX). It has hedged Rs 13 crore in gold and silver over the last one month.

The handicraft promotion agency, which also imports precious metals, booked six tonnes of silver worth Rs 11 crore and 20 kg of gold worth Rs 2 crore on various contracts.

"We are trading only for taking physical delivery and nothing else," said an official involved in trading.

It sells precious metals to its associates and sells BIS halmarked jewellery directly to its customers.

The corporation has also entered into silverware trade abd organises exhibition-cum-sale in India and abroad. "We engage leading fabricators of the country to manufacture silverware on the parameters set by us at our terms and conditions," said the official.

In the current financial year, the corporation is planning to book about Rs 100 crore worth precious metals, including gold and silver, on MCX. The handicraft corporation has also set a target of importing gold and silver worth Rs 750 crore directly.

It has already achieved the import figure of Rs 600 crore, and hopes to cross the target on the rising demand for silverware. "If the price was competitive and the trading platform fair, there's nothing wrong in trading on MCX," said an expert.

Domestic platforms offer the opportunity to read the market sentiment and book when the prices are low and exit when they are ruling high.

Of the average daily turnover of Rs 12,000 crore on MCX, precious metals form 55 per cent with giant corporates such as Suraj Diamonds, Auro Gold and Tanishq among active traders.

In the first half of November, gold prices showed high volatility, with international prices moving from well below $800 per troy ounce to more than $845.

On MCX, the near month gold futures started the month at Rs 9,980 per 10 grams before scaling to a high of Rs 10,685, before falling to Rs 10,125 on November 12.