The Hindu Business Line : Revival of coffee bourse unlikely

The Coffee Futures Exchange of India (Cofei), which runs the exchange, however, plans to help one of the multi-commodity exchanges to launch futures contract.

"Cofei does not have plan to revive the futures. We think there is no place for single commodity futures and, therefore, we may help either the Multi Commodity Exchange or the National Commodities and Derivatives Exchange (NCDEX) to launch futures contract," sources in the know said.

Cofei officials, when contacted, declined comment.

According to the sources, Cofei has held talks with NCDEX for launch of coffee futures. "But it is unlikely that the coffee exchange will have any role in it," the sources said.

According to the sources, this is since the bourse officials feel that their members may not agree to either of the multi-commodity exchanges contracts being traded on their exchange. "Instead, they may prefer to become members of one of the multi-commodity exchanges," the sources said.

Cofei is likely to decide on further course of action after discussing it with the members. "Any decision that is taken will be with the permission of the members," the sources said.

Regretting that Cofei has been unable to revive the futures exchange, the sources said: "Maybe, it was ahead of times."

The coffee bourse had several first to its credits, including being the first futures exchange in the country to go on line. When it was launched, Cofei used the premises and infrastructure of the Bangalore Stock Exchange for online trading. Later on, due to increasing costs, it shifted out of the stock exchanges' premises.

Cofei also has the distinction of being the first in the world to launch futures in raw coffee. This was in June 2000.

Cofei was also the first to bring in the concept of warehouse receipt system.

Since it began witnessing poor turnover, mainly due to falling prices, Cofei mulled various options.

"One was to attract corporate houses, which were engaged in exports of coffee. Unfortunately, they did not show much interest," the sources said.

The exchange had also chalked a strategy on immediate payment for growers as soon as they brought their produce to a warehouse. "That, too, unfortunately, could not take off," they said.

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