Pratim Ranjan Bose

MCX yet to identify agency

Kolkata , Aug. 21

Non-availability of quality certification agencies in West Bengal has put a question mark over MCX's proposed launch of future contracts on Kufri Jyoti potatoes in early September.

Popularly known as Bengal potato, Kufri Jyoti is the most popular seed in West Bengal.

According to sources, while MCX is interested in launching the two contracts (November and March) linked to Tarakeswar spot market in Hoogly district as early as September 1, the exchange is yet to tie up with a quality certification agency, as most of them are yet to set shop in West Bengal.

Talks on

While reputed agencies like Safal of NDDB does not have testing infrastructure in the state, Dr Amin Laboratories does not offer services on potatoes. Negotiations with other such agencies like Geochem are yet to reach a definitive stage.

Since futures trading on agri-commodities are compulsorily delivery backed, quality certification is obligatory on the part of the exchange.

Quality certification apart, there are also fears about the quality of the end-season stock at the cold storages and the resulting problems in delivery. It may be mentioned that cold storages in the state remain closed between December and February.

Bullish market

Commodity market sources, however, think that quality would not be a major issue for launching the contract as investors would prefer to cash in on the bullish market conditions and would settle the contract at the payment of penalties.

"Irrespective of over production, potato prices are up due to the overall bullish sentiments in the agri-commodity market", said one source.

According to him, prices are likely to remain bullish till the end of the major festive season in the state in October.

Potato prices for September contract on 3797 variety closed at Rs 578 a quintal at MCX on Saturday, registering 2.4 per cent rise during the last week.

© Copyright 2000 - 2009 The Hindu Business Line