It has been a bit of a delivery dilemma for MCX, both with respect to cotton as well as gold. Over a lakh cotton bales are lying in warehouses for want of takers and that seems to be a bit of an issue. PS Reddy, MD and CEO of MCX, in an interview to CNBC-TV18, shared his views and outlook.
“There is absolutely no problem on the MCX platform. The cotton deliveries are happening and the season is coming to an end in October. The entire cotton will be lifted and there is absolutely no problem with the cotton quality,” he said.
When asked about various reports on how major companies as well as members of MCX wanted a quality check before the deliveries could take place, he replied, “We have a system and whenever we have a doubt, especially because of this prolonged rainy season, we have undertake the quality checks on our own. There is absolutely no problem.”
“Towards the expiry of the contract, no additional deliveries come into the market. So the cotton is getting lifted and the new cotton will start arriving sometime in November. So there is absolutely no problem at all. I don’t know who is making these rumours,” said Reddy.
On gold prices, Reddy said, “We have about Rs 2,000 crore insurance spread across three vaults, all based in Ahmedabad. If anyone chooses to deposit the entire Rs 1,800-2,000 crore worth of gold in one vault, probably it is not feasible. That is what our valued customer wanted to do that but we tried to accommodate it by taking additional insurance cover, it didn’t happen overnight. So the gold has to be deposited into the other two vaults where we have higher insurance cover. Post that issue, we have increased the insurance cover in all the three vaults. So there is absolutely no problem."