MCX to work with Kerala spice mart

The Multi Commodity Exchange (MCX) has signed a memorandum of understanding with the India Pepper & Spice Trade Association (IPSTA) to work together.

The alliance will enable IPSTA to provide wider geographical reach, build up turnover and liquidity, encourage wider participation, attract new members and consolidate the position of IPSTA in the spices commodity market.

Jignesh Shah, managing director of MCX, said, "We have tremendous respect for the knowledge base that Indian regional commodities exchanges have built over the decades. They are knowledge universities in their respective domain. Thus it's immensely important for national exchanges to work on an inclusive approach and not an exclusive approach with regional commodities exchanges."

Shah said the approach would bring the business from regional exchanges into the national mainstream through exchanges like MCX.

National futures exchanges which have consolidated operations on a national level should open up fresh access points to regional exchanges, Shah added.

Kishore Shamji, president of IPSTA, said at the signing ceremony, "The country is going through a revolutionary phase in the commodity futures markets. A combined effort is important."

The hub and spoke model will lead to wider reach for the MCX trading network through the regional exchanges.

Getting participation on a national level platform will benefit regional exchange participants.

The pact with IPSTA will enhance the potential and opportunities available in Kerala for plantations and spices traders.

IPSTA members can hope for better liquidity, greater access to best price information and also strengthen Kerala's leadership in the spices sector.