MCX set to kick off potato futures today

Multi Commodity Exchange of India (MCX) is launching futures trading in potato, which is a perishable commodity, tomorrow.

April and May delivery contracts will be launched with 'saintis satanve' potato variety with sizes in the range of 40 mm to 80 mm. The contract will be ex-Agra cold store delivery and will be available from March to October.

The contract will be settled on the 15th of the month based on the last three days' average spot price prevailing at Agra. Saintis satanve or the 3797 variety is also ideal for storage and can be delivered during the contract availability period. The trading unit is 30 tonne with tick size of 10 paise and initial margin of 6 per cent.

Joseph Massey, deputy managing director, MCX, said, "In order to protect the interests of potato producers, the central government has mandated that a price discovery and hedging platform be made available. In view of this and also because of demand from the market players, MCX has decided to launch potato futures. With phenomenal increase in potato production in the last ten years, gluts have become recurring and common in the country. Prices crash drastically during harvesting months leading to panic sales by farmers. This, in turn, results in heavy monetary losses for them. Sometimes, the farmers are not able to even cover their cost of production."