MCX Unveils Cotton Seed Wash Oil Futures for Market Stability

MCX announced the launch of cotton seed wash oil futures, providing a 5-tonne trading unit. The contracts, with a margin requirement of 12%, are cash-settled to aid risk management. This initiative aims to mitigate price volatility, benefiting the cottonseed oil industry, especially the crushers.

The leading commodity exchange, Multi Commodity Exchange (MCX), has unveiled futures contracts for cotton seed wash oil, providing a novel risk management tool for industry participants.

Each contract will consist of a 5-tonne trading unit, with pricing measured in Rupees per 10 kg at Ex-Tank Kadi, Gujarat, ensuring a localized market standard. With a margin requirement of 12%, these contracts are positioned as accessible hedging instruments.

The initiative, set to be cash-settled, promises heightened capacity for efficient risk handling. It offers significant advantages to the cottonseed oil sector by stabilizing price fluctuations and supporting crushers facing unpredictable market changes and material shortages.

(With inputs from agencies.)