MCX to launch rubber futures on Aug 16

MCX to launch rubber futures on Aug 16

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The Multi Commodity Exchange of India (MCX) is launching a rubber futures contract on Thursday as it looks to expand its offering in the agriculture segment.

Contracts ending in September, October, November and December 2018, with Ribbed Smoked Sheets 4 as the underlying, will be available for futures trading from August 16.

“The launch of Rubber Futures Contract signifies an important development for MCX as we introduce another new commodity in the agri segment,” Mrugank Paranjape, managing director and chief executive officer of MCX, said in a statement on Tuesday.

He added: “With the launch of this new contract, we expect to provide transparent and fair benchmark prices that closely reflect supply and demand fundamentals in physical rubber market.”

The new agri contract is targeted towards all participants in the rubber value chain, including growers, traders, exporters, importers, and tyre manufacturing companies, recognising that India is one of the major consumers and producers of natural rubber.

MCX also announced via a series of circulars on Tuesday that it will be making three other contracts available for trading on August 16.

The Gold August 2019 contract will become available for futures trading, as will the Cardamom January 2019 contract.  

Additionally a Gold Option July 2019 contract, with Gold (1 Kg) futures as underlying, will become available for trading from Thursday – just under a year after the exchange was given approval to launch options on gold futures.

This comes two weeks after MCX was given approval from India’s main financial regulator, the Securities and Exchange Board of India (SEBI), for its Multi Commodity Exchange Clearing Corporation Limited (MCXCCL) - the first clearing corporation in the commodity derivatives market.

MCXCCL will become the central counterparty for all trades executed on MCX’s trading platform, handling collateral management, risk management functions and clearing and settlement of trades.

Last year, SEBI scrapped restrictions that precluded commodity derivatives brokers from dealing in other securities and vice versa.

Ahead of the implementation of the new Universal Exchange framework, which is expected to be introduced in October, MCX was allegedly in talks with the National Stock Exchange of India about a merger which would have created a dominant universal exchange.

FOW will be hosting its India International Derivatives Conference on September 25 discussing opportunities in the markets, Gift City, the commodity markets, and innovation among other things. 

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