"Cardamom is one of the most exotic and highly prized spices of India," says Jignesh Shah, managing director and CEO, MCX. "Major reforms have taken place in the commodity markets over the past few years and this launch will provide a reliable, transparent and efficient price risk management tool for cardamom growers, traders and exporters. The ultimate objective of this initiative is to reap the economies of scale and scope not only for its own sake but also to face the challenges thrown up by the opening up of the global market."

The grade specified for trading in MCX is cardamom 7mm and above with a litre weight of 400gm and above. The trading unit for cardamom contracts is specified at 100kg (one quintal) by the exchange. The price quotation will be 'ex- Vandanmedu, Dist. Idukki, Kerala. The tick size of the contract is 10paise / kg with a daily price limit of 6 per cent.

Trading in a contract month will open on the 16th of the month and would run for a period of five months. Each contract would expire on the 15th day of the contract month. There would be an initial margin of 7 per cent. Delivery will be in lots of 100kg at exchange-approved Kerala State Warehousing Corporation specialised warehouse located at Vandanmedu in Idukki district of Kerala.

Vandanmedu is, the main cardamom growing and trading centre in Kerala and has the best climatic condition suited for the efficient storage of cardamom.

The total annual productioc of cardamom in the country is about 14,000 tons, which arrives from August to May. The main Cardamom varieties are Alleppey Green Extra Bold 7mm and above (AGEB) & Alleppey Green Bold 6.0mm (AGB).

About 90 per cent of the produce is consumed with in the country while remaining produce is exported, with Saudi Arabia and Japan being India's major importers.