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According to the industry sources, since MCX has received final approval for revised cotton contract, it is now for the exchange to make necessary arrangements for the launch of the contract. The current, December 2022 contract will expire today, i.e., on Friday, December 30. It is the only contract available for trading as new contracts were banned in August 2022 for revision.
India may not have cotton future contract for trading in the very beginning of the new year 2023. Securities and Exchange Board of India (SEBI) has given its approval to Multi Commodity Exchange (MCX) to launch revised cotton contract. But the exchange is yet to announce the launch of contract. MCX will open for trading on Monday, January 2, 2023.
A committee of various stakeholders, including from the textile industry, discussed various aspects of the contract. When there was exorbitant price rise in cotton this year, the textile industry cited future trading as one of the reasons for the same. At that juncture, SEBI stepped in and decided to discontinue the contracts and form a committee for revision in the specifications.
A member of the committee told Fibre2Fashion, “New cotton contract is ready after necessary changes. SEBI has given its final approval. Now, MCX has to launch new contract after necessary arrangements. However, it may take some time.” The member clarified that there was no need for further approval from the ministry of finance or any other authority. There were speculations that the contract may require final nod from the ministry as it has structural changes.
As per modified contract launch calendar for cotton (29mm) February, April and June 2023 contracts will have to be launched in December 2022, but they may come in January 2023. Last contract of the current cotton season (October 2022-September 2023) for August 2023 will be launched in February 2023.
For the next season, November, January, March, May, July and September contracts will be available for trading. November 2023 and January 2024 contracts will be launched in May 2023, March 2024 contract in September 2023, May 2024 contract in November 2023, July 2024 contract in January 2024, and September 2024 contract in March 2024.
Fibre2Fashion News Desk (KUL)
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