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Why is the proportion of futures contracts resulting in delivery so low?

April 26, 2017contracts DELIVERY Futures low proportion

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Why is the proportion of futures contracts resulting in delivery so low?

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Futures contracts are standardized contracts and therefore various aspects of the contracts, ciz., quality/grade of the goods, packing, place of delivery, etc. may not meet the specific needs of the buyers/sellers. These contracts are more suitable for price risk management and delivery is incidental on an Exchange platform to ensure that futures prices are not out of sync with the spot market prices. The standardization of the futures contracts limits its utility as a merchandising contract.