Bodinayakanur (Tamil Nadu), January 28, 2016: Multi Commodity Exchange of India Ltd (MCX) and Cardamom Planters’ Association jointly organized an awareness programme focused on hedging cardamom price exposures, in Bodinayakanur (Tamil Nadu) on Wednesday, January 27, 2016.
The experts during the programme educated participants on the need to manage price risks and volatility associated with cardamom prices. They explained in detail about the MCX cardamom contract, which has been well accepted by its stakeholders— planters, exporters, marketers and processors.
The interactive session further focused on fundamentals of trading in commodity futures, benefits and importance of hedging; price discovery and price risk management which are the most commonly acknowledged benefits accrued from a successful, liquid commodity futures contract. The market participants were also explained about the technicalities of working of the commodity markets with respect to transparency and risk management mechanism in trading and settlement of transactions.
While making a presentation to the members of Cardamom Planters’ Association, Mr. T.G. Senthilvelan, Assistant Vice President-Business Development, MCX said “The Exchange enables risk management against price volatility, and at the same time, it is also a platform where the cardamom prices discovered are the true reflection of the real prices as the participants on the platform are from across the country and represent all sections of the economy.”
“Moreover, the studies done by reputed institutions such as the United Nations Conference on Trade and Development (UNCTAD), IIM Kozhikode, etc. have recorded the significant benefits that accrue to cardamom stakeholders, particularly farmers, from the efficient price discovery and dissemination platform that MCX provides for cardamom”, he added.
Mr. S V Subramanian, President, Cardamom Planters Association said, “ In the present scenario, where the market dynamics depend on the external factors, it is absolutely critical for the cardamom stakeholders to manage their price exposures through exchange traded cardamom futures contracts.”
As per the Spices Board, Indian cardamom output has been rising steadily from 10,380 tonnes in 2010-11 to 15,000 the next fiscal and to 16,000 tonnes in 2013-14. In 2014-15, it is estimated at 18,000 tonnes. The trade estimates put the production in 2015-16 at around 30,000 tonnes. According to trade sources in Kerala’s Idukki district and the country’s main trading hub Bodinayakannur in Tamil Nadu, the total output for the current season 2015-16 is estimated at around 30,000 tonnes.