India's largest commodity bourse - the multi commodity exchange - will launch futures trading in raw jute soon.
MCX officials said the futures contract on the exchange platform may be opened on TD-4 variety, ex-Bengal. The contracts will have physical delivery options as required by the Forward Contract (Regulation) Act.
The exchange is yet to decide whether to launch a monthly maturity or bi-monthly maturity jute contract so that the counter remains vibrant round the year. Contract size may be less than 20 tonne or equivalent to two truck loads of the fibre.
MCX decision to launch the jute futures comes in the wake of a study that the exchange conducted on the commodity.
The study said that with an annual production of 80-90 lakh bales of raw jute in the country, there is a good possibility of volume turnover in the futures market. It is estimated that the futures turnover in jute may be around Rs 500 crore in the initial phase of the trading. One bale is equivalent to 180 kg.
MCX is to apply to the Forward Markets Commission for its approval on jute futures.
Officials said, if the FMC approval comes by July, MCX ill open raw jute futures contract from August.
Already, the other two national commodity exchanges National Commodity and Derivatives Exchange and National Multi Commodity Exchange are trading in raw jute.
