MCX to trade in cashew

Multi Commodity Exchange has launched the world's first cashew futures trading, This move is expected to assist Indian producers and processors manage price risks, and allow overseas buyers to spot price movements based on supply and demand factors.

Joseph Massey, deputy managing director MCX said, "In the last couple of years the cashew trade has turned from a supply driven market to demand driven.

This has in turn increased competition among producing countries like Brazil, Vietnam, Tanzania. Further, other surrogate nuts have challenged the Indian dominance in the sector."

India now accounts for 60 per cent of world cashew kernel supply. It exports about 106,200 tonnes annually to over 60 countries raking in Rs 900 crore foreign exchange revenues.

Also it is the third largest consumer after the US and EU, accounting for 20 per cent of the global consumption.

The launch of futures trading in cashew will help the industry that till now lacked risk management mechanisms and price discovery modes.

The wide fluctuation in cashew prices has curbed its usage by foreign confectionery manufacturers. This move, by allowing price hedging will eliminate the shortcomings.

MCX will offer futures trading for the white whole 320 cashew grade, with contract size of 50 cartons (22.6 kg each), quoted ex -Quilon (Kollam). A statement from MCX said, delivery size will be in multiples of 350 cartons.

MCX facilitates online trading, clearing and settlement operations for commodities futures. It now has under its trading platform commodities like gold, silver, steel and other metals, Kapas, cotton, rubber, pepper, oil and oil seeds, pulses, wheat and rice.