Only national commodity exchange to launch Coffee Contract – Robusta Cherry EP Bulk
Bangalore, September 9, 2008: National Multi-Commodity Exchange of India Ltd. (NMCE), the country’s first online demutualised, multi-commodity exchange, today announced the re-launch of futures trading in Coffee Robusta.
The announcement was made by Mr. Anil Mishra, CEO, NMCE at a function here today. The launch ceremony was inaugurated by Shri B C Khatua, Chairman, FMC who did the inaugural trade. The function was attended by large number of planters, exporters, traders, processors and coffee board officials.
Coffee has significant economic and social relevance in India. Globally coffee is the second highest traded commodity in the world after crude, while India is the 6th largest coffee producer in the world.
The NMCE coffee contract specification has changed from Robusta Cherry AB to Robusta Cherry EP Bulk. This has been done to ensure larger participation from all stake holders, as this quality is largely produced in both Karnataka and Kerala; and is used as raw produce for further processing. NMCE is the only national commodity exchange to launch this contract.
Said Mr. B C Khatua, Chairman, FMC “Since NMCE has designed this contract after a series of talks with planters, traders, processors, exporters and experts from coffee board, we believe that maximum stakeholders, big and small, should be able to participate.”
Coffee will be traded on the NMCE platform during domestic and global session up to 10:00 PM, so that Indian exporters, who make export trade and commitments late in the evening, are able to hedge their commitment on real-time basis on NMCE.
“India produces about 2,90,000 metric tons of coffee annually which constitutes 100,000 tons and 1, 90,000 tons of Arabica of Robusta coffee respectively. More than 70 percent of coffee produced in India is exported to over 50 countries accounting for US$ 458.18 million (Rs 1907 Crores) annually in revenues. With permission of evening trading, exporters will be able to cover their price risk exposure at the same time as others in the global coffee market,” said Mr. Sudip Bandyopadhyay, Director, NMCE.
Initially, NMCE Robusta Cherry EP Bulk Coffee Futures contracts will be available for the months of November 2008 and January 2009. The contracts shall be bi-monthly. During the subsequent months March 2009 and May 2009 contracts will be launched.
“We strongly believe that this initiative to start coffee futures with the new quality specifications would enable planters and small traders to hedge their entire produce as compared to earlier contracts which were for smaller percentage of AB quality. Coffee futures introduced today by NMCE will provide not only an effective price discovery mechanism, but also enable the coffee growers pan India to make intelligent decision on selling their produce and thereby capture better values,” said Mr. Kailash Gupta, MD, NMCE.
As per the contract specifications, basis variety is Robusta. Daily price limit is 2 percent, the initial margin is 5 percent and tick size is 50 p. Trading and delivery unit is 1.5 metric ton (25 bags with net weight of 60 kg each). Delivery centers are NMCE designated warehouse at Kushalnagar, Chikmagalur, and Hassan in the states of Karnataka and Kalpetta in the state of Kerala.
India being a coffee exporting country needed a hedging instrument which is linked to international timing. Coffee is grown in over 388,195 hectares out of which, 98.8% are small holders. India has consistently produced and exported a remarkable variety of high-quality coffees for over one hundred and fifty years.
About National Multi-Commodity Exchange of India
www.nmce.com
The National Multi-Commodity Exchange (NMCE) was launched on November 26, 2002 as the country’s first online demutualised, multi-commodity exchange with nationwide reach. It is promoted by the country’s largest warehousing corporation CWC along with NAFED – the country’s apex body of marketing cooperatives, Punjab National Bank, the second largest public sector bank and the Government of Gujarat. NMCE not only revived futures trade electronically in commodities in India after a gap of 41 years, but also integrated the centuries old commodity market with the latest technology.
NMCE offers an electronic platform for futures trading in plantation, spices, food grains, non-ferrous metals, oilseeds and their derivatives and is backed by compulsory delivery based settlement to ensure transparent and fair trade practices. It is the first to introduce efficient clearing and settlement system backed by adequately capitalised corporate brokerage houses in commodities with sound and reliable transferable warehouse receipt system, using appropriate communication channels.
For further details –
Poonam Gupta NMCE +91-9825017610
B. N. Kumar Concept Communication +91-9321048332 mailbnk@gmail.com
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