In a first of its kind programme, a commodity exchange- Multi Commodity Exchange (MCX)and a bank- Axis Bank came together today to educate the farming and agri-trading community about the effective use of commodity futures market as a risk management platform.
The awareness programme was organised in Beavar in Rajasthan, a cotton growing state. Explaining the benefits of futures trading in cotton to the commodity stakeholders, the experts from MCX said that futures trading in cotton has come a long way in benefiting millions of market participants such as the cotton growers in India. They further highlighted the fact that, the Exchange has been able to gain the confidence of India’s cotton trade fraternity through its cotton futures contract, which has been well accepted by the cotton value chain players across India â”€ farmers, millers, ginners, exporters, and spinners, among others. In today’s scenario where cotton prices in the Indian market have witnessed radical movements, MCX’s cotton contract has gained relevance as one of the best hedging tools to reduce or limit risks associated with such price changes, they said.
Axis Bank showcased its ‘Commodity Power’ offering, a unique and customer friendly credit facility which finances the pledged stocks of agro commodities stored in various godowns/warehouses/cold storages managed by CWC/SWC/Private warehouses, under the supervision of the empanelled Collateral Managers of the Bank.
Agri value chain participants who have taken loans for processing can now manage their price exposures by hedging on exchanges to maintain their bottom lines.
Stakeholders of the cotton value chain, especially agricultural loanees—farmers, processors, traders, millers, aggregators—participated in huge numbers at the programme to make it a success. They were pleased to note that by trading on a commodity exchange such as MCX they can mitigate their price risk effectively and efficiently.
Separately, the experts also briefed about how cotton stakeholders can safeguard themselves against the crop failures, falling commodity prices and seek loans against valid warehouse receipts.