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MCX amp Axis Bank organize a programme on Cotton Hedging for Agri Borrowers

290 Days ago

Beavar (Rajasthan), September 8, 2015: Multi Commodity Exchange (MCX) and Axis Bank jointly organised an awareness programme for cotton farmers and traders in Beavar (Rajasthan) on September 8, 2015, aimed at enhancing cotton hedgers’ participation in the commodity derivatives market.

The program is a first of its kind, where a Commodity Exchange and a Bank have come together to educate the farming and agri-trading community about the effective use of commodity futures market as a risk management platform.  

During the programme, while explaining about the benefits of futures trading in cotton, to the commodity stakeholders, the experts from MCX stated 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 ─ 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 bottomlines.

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.

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