Mumbai, Sep 9 (UNI) National Multi-Commodity Exchange of India Ltd. (NMCE), the country's first online demutualised multi-commodity exchange, today re-launched futures trading in Coffee Robusta.
Forwards Market Committion Chairman B C Khatua conducted the inaugural trade in the midst of a large number of planters, exporters, traders, processors and Coffee Board officials in Bangalore.
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.
Mr Khatua, in his address, expressed hope that a maximum number of stakeholders participate in the trading launched after a series of talks with planters, traders, processors, exporters and experts from coffee board.
Coffee will be traded on the NMCE platform during domestic and global session up to 2200 hrs, 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 said.
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.
As per the contract specifications, basis variety is Robusta.
Daily price limit is two percent, the initial margin is 5 percent and tick size is 50 p. Trading and delivery unit is 1.5 tonnes (25 bags with net weight of 60 kg each). Delivery centres are NMCE designated warehouse at Kushalnagar, Chikmagalur, and Hassan in the states of Karnataka and Kalpetta in the state of Kerala.
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