MCX & Spices Board of India jointly organized a seminar on Cardamom Futures for Farmers in Gangtok

Gangtok (Sikkim), May 4, 2016: Sikkim is one of the leading producers of large cardamom, which is the main cash crop of the farmers and they grow this high value crop extensively in the state. Keeping this in mind, Multi Commodity Exchange of India Ltd (MCX) and Spices Board of India (Gangtok Division) jointly organized an awareness seminar for farmers focused on cardamom price risk management, in Gangtok (Sikkim) on May 3, 2016. They were explained about the need to manage price risks and volatility associated with cardamom prices, while highlighting the benefits of cardamom futures contract offered by MCX, which has been well accepted by its stakeholders— farmers, exporters, marketers and processors.
Cardamom is one of the significant crop which earns foreign exchange for the country. Production in this commodity has increased since the introduction of the futures trading in it, which has helped in putting up the right marketing channel and formal market platform.
The officials from MCX explained in detail, how the cardamom farmers have been benefiting immensely by way of access to a national level electronic futures exchange such as MCX. They explained that, the prices discovered on the only cardamom futures exchange have emerged as a benchmark price for all grades of cardamom. In fact, without this benchmark, cardamom farmers and other stakeholders would not have a national-level real-time reference price. More significantly, the variety of cardamom whose price is discovered on the MCX platform is a well-accepted grade for export purposes and in the domestic retail market. The quality consciousness induced in the value-chain on account of the preference for MCX-Grade cardamom has led to farmers increasingly opting for grading of their produce to ensure better realization, they elaborated.
Studies by reputed institutions such as the United Nations Conference on Trade and Development (UNCTAD), IIM Kozhikode, etc. have recorded the significant benefits that accrue to cardamom stakeholders, particularly farmers, from the efficient price discovery and dissemination platform that MCX provides for cardamom.
While making a presentation to the farmers present at the seminar, Mr. Vibhor Tandon, Assistant Vice President-Business Development, MCX said “In addition to serving their most important role as a price risk management tool, cardamom futures contracts also help farmers by empowering them to make better cropping, selling / buying decisions, improving flow of information across the entire cardamom ecosystem, increasing farmer’s share of the price paid by end-consumer, developing better storage, grading infrastructure and improving access to finance.”
Mr. Chandra Sekhar Ghatani, Assistant Director, Spices Board of India (Gangtok Division) said, “Despite the rapid growth of the Indian economy since the last two decades, the agriculture sector has not kept pace with other sectors. Farmers often lack access to crucial information, which limits their ability to obtain fair prices for their crops. Moreover, many farmers have to deal with corrupt middlemen who take advantage of their lack of market information. In this regards, the efforts of commodity exchanges such as MCX are commendable in bridging this knowledge gap by empowering farmers with access to a nation-wide electronic platform for market players to buy or sell commodity futures contracts, in this case cardamom derivatives contracts, facilitating efficient price discovery mechanism.”