MUMBAI, APRIL 1
NCDEX has launched new modified cotton contracts expiring on April 18, October, November and December. The 29 mm cotton futures contract is aimed at addressing the risk management requirements of the value chain participants in the cotton trade.
The exchange registered no trade in the contract launched on Monday. "We will spend the next few days in creating awareness and expect volume to pick up in the coming days," said an exchange official.
NCDEX expects the participation of ginners, spinners and exporters in this contract. The cotton contract will be based on the direct delivery model, whereby the seller will directly deliver the cotton bales to the buyer. The seller can deliver the lots (of 100 bales each), either at Rajkot (basis centre) or in Kadi (additional delivery centre).
Buyer has to specify a warehouse where they would like to take the delivery. The delivery centre has to be within 100 km of the municipal limits where the seller has tendered their delivery. Seller would deliver the cotton bales at the buyer's warehouse, where it would be checked for quality by an exchange appointed assayer.
It is a compulsory delivery contract, with the seller having a window starting five days before the contract expires. The entire settlement cycle would be completed within eight days from the day of tendering, the exchange has said. (Source: The Hindu Business Line)