Futures trading in potato started last year with contracts available on both MCX and NCDEX and things began changing. The MCX contract is based on prices at the cold storage and the NCDEX contract is based on mandi prices at Delhi.
The average daily turnover of potato futures Agra variety (3797 contract) on MCX is between Rs 50-60 crore and average volume is 30,000 tonnes. About 4,000-5,000 tonnes are delivered at the contract expiry.
MCX vice-president (business development) Sanjit Prasad said that to make their contract more market friendly, delivery centres will be set up at Ferozabad, Mahamayanagar, and Dhaulpur. MCX will also start collection centres, to be set up by MCX's warehousing arm NBHC. Farmers can sell their produce directly to investors on MCX at the spot price with immediate cash payment. MCX plans to have 40-50 such collection centres.
Farmers can take a cue from futures prices on exchanges before they decide whether to store or sell. Earlier storage was done by intermediaries who charged more than 35% of what consumers paid. Now the farmer stores the potatoes in exchange accredited warehouses. He can take a loan and sells the commodity at a future date. This improves incomes and prevents distress selling.
The average daily turnover of potato futures Agra variety (3797 contract) on MCX is between Rs 50-60 crore and average volume is 30,000 tonnes. About 4,000-5,000 tonnes are delivered at the contract expiry.
MCX vice-president (business development) Sanjit Prasad said that to make their contract more market friendly, delivery centres will be set up at Ferozabad, Mahamayanagar, and Dhaulpur. MCX will also start collection centres, to be set up by MCX's warehousing arm NBHC. Farmers can sell their produce directly to investors on MCX at the spot price with immediate cash payment. MCX plans to have 40-50 such collection centres.
Farmers can take a cue from futures prices on exchanges before they decide whether to store or sell. Earlier storage was done by intermediaries who charged more than 35% of what consumers paid. Now the farmer stores the potatoes in exchange accredited warehouses. He can take a loan and sells the commodity at a future date. This improves incomes and prevents distress selling.
