Traders and farmers in north India are expecting good fortunes to come their way with Multi Commodity Exchange (MCX) all set to launch futures trading in potato on March 9. The major potato markets in north India are Jallandhar, Ludhiana, Hoshiarpur, Phul, Patiala in Punjab, Agra, Kanpur, Meerut, Farrukhabad in UP and Shahbad in Haryana. |
Jagjit Singh Arneja, operations manager, Ludhiana Stock Exchange Commodities Trading Services, said, "The major beneficiaries would be the traders and farmers of UP as the potato variety, 3797 is mainly produced there. Punjab mostly produces Kufri variety of potato, which has currently not been included in the contract. With online trading gaining momentum, the farmers here would start growing the 3797 variety, as the environment is conducive to its growth.'' |
"As the volumes would increase in potato trading, we hope MCX would also include Kufri variety for futures trading as it is produced abundantly in the region. The exchange has not included Kufri as it has lesser shelf life because of its thinner skin, compared with the 3797 variety. But Kufri is nutritionally superior and free from internal and external defects. We hope the exchange will include other varieties of potato and also set up a warehouse in Punjab very soon,'' he said. |
"We get a lot of enquiries about the futures trading in patato in our branches in Punjab and Haryana. Recently, the potato crop in Punjab was destroyed and farmers and traders can now also expect to take cover to reduce risk using various hedging mechanisms,'' he added. |
"For the contract, the minimum lot size would be 30 tonne and an initial margin of 5-10% would be required. Presently, potato is traded at about Rs 400 to 450 per quintal and the trading is expected to begin at the same rates,'' said Gaurav Joshi, commodities analyst at Vikson Finance and Investments, Chandigarh. |
During 2004-05, 24.15 million tonne potatoes were produced in the country while production figure for 2003-04 is 23.27 million tonne. According to estimates, potato production during 2005-06 is expected to touch 24.65 million tonne. |
"We expect good response as farmers have a good knowledge of the crop and are expected to reap good profits. Moreover, there are many big traders in Chandigarh market and they are preparing to trade in the commodity in a big way'', Joshi added. |