MCX rolls out cardamom futures

The Multi Commodity Exchange of India Ltd (MCX) has announced the launch of cardamom futures.

The grade specified for trading in the MCX is cardamom 7mm and above with a minimum litre weight of 400 grams. The trading unit for cardamom contracts is specified at 100 kg (one quintal) by the exchange. The price quotation will be ex-Vandanmedu, dist. Idukki, Kerala. The tick size of the contract is 10 paise/kg with a daily price limit of 6 per cent.

Trading in a contract month will open on the 16th of the month and would run for a period of 5 months. Each contract would expire on the 15th day of the contract month. There would be an initial margin of 7 per cent. Delivery will be in lots of 100 kg (one quintal) at the exchange-approved specialised warehouse of Kerala State Warehousing Corporation located at Vandanmedu in the Idukki district of the state.

Vandanmedu is, the main cardamom growing and trading centre in Kerala and has the best climatic conditions suited for the efficient storage of cardamom.

The total annual production of cardamom in the country is about 14,000 tonne, which arrives from August to May. The main cardamom varieties are alleppey green extra bold 7mm and above (AGEB) and alleppey green bold 6.0mm (AGB).

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

Commenting on the launch, Jignesh Shah, managing director and CEO, MCX said, "Cardamom is one of the most exotic and highly prized spices of India. Major reforms have taken place in the commodity markets over the past few years and this launch will provide a reliable, transparent and efficient price risk management tool for cardamom growers, traders and exporters."

"The ultimate objective of this initiative is to reap the economies of scale and scope and face the challenges thrown up by the opening up of the global market," he added.