07 July 1998
Bombay cotton futures exchange `good for farmers
INDIA is to start futures trading in cotton after a break of 32 years.
The East India Cotton Association (EICA), which has sponsored the new exchange in Bombay, will start mock trading in the next few weeks while it awaits the federal Governments formal clearance.
The EICA says futures trading will lend stability to cotton farming. President Suresh Kotak said the farmers could make use of the “price discovery” mechanism to decide how much land to commit to cotton in a season.
Trade officials say the EICA is in a hurry to launch futures trading because the South Indian Cotton Association is planning a rival exchange in Coimbatore (ok).
The unit of trading will be 55 bales of 170kg each. Quotations will be on 100kg basis.
- Financial Times 07/07/98 page 34