Raw silk futures take off at NCDEX

Recently launched future contracts in raw silk and cocoons are expected to revolutionalise the domestic silk trade.

The Union government in association with the National Commodities & Derivatives Exchange (NCDEX) has launched future contracts in raw silk and cocoons from January 20, 2005.

The Central Silk Board (CSB) and NCDEX have jointly designed the future contracts for mulberry cocoons and raw silk. CSB will provide the warehousing facility and quality testing facility for deliveries. Initially, futures trading in mulberry cocoons will commence with delivery centres situated in Dharmapuri, Tamilnadu; Hindupur, Andhra Pradesh and Ramanagaram (Karnataka). For raw silk, Kanchipuram, Tamilnadu; Dharamavaram, Andhra Pradesh and Varanasi, Uttar Pradesh will be the delivery centres.

While launching the silk futures on NCDEX, Mr Shankarsinh Vaghela, textile minister praised the joint effort and said that with such a tool available, farmers, reelers as also the industry will be able to hedge their risks in terms of price fluctuation. “I am sure that all stakeholders in the industry will immensely benefit by futures trading through better price discovery, quality-linked pricing and dissemination of vital market information,” added Mr Vaghela.

“The process of globalisation and the implementation of the WTO agreements in the textile sector will make the Indian processors and farmers vulnerable to the volatility in raw material prices. With the objective of protecting the interests of the affected group of people, the Union government jointly with NCDEX has adopted a policy of encouraging future contracts in silk,” stated Mr P H Ravikumar, managing director, NCDEX.