The Hindu Business Line : NMCE launches revamped coffee futures

Initially, NMCE Robusta Cherry EP Bulk Coffee Futures contracts will be available for November and January. Subsequently March 2009 and May 2009 contracts will be launched, the exchange said.

Coffee will be traded on the NMCE platform in the domestic and global session up to 10 p.m. The NMCE coffee contract specification has been changed from Robusta Cherry AB, which is largely produced in both Karnataka and Kerala. It is also used as raw produce for further processing.

The contract will have a daily price limit of two per cent and initial margin of five per cent. The tick size will be 50 paise. Trading and delivery unit is 1.5 tonnes (25 bags with net weight of 60 kg each). Delivery centres are at Kushalnagar, Chikmagalur, and Hassan in Karnataka and Kalpetta in Kerala.

Inaugurating the coffee futures in NMCE, Mr B.C. Khatua, Chairman, Forward Markets Commission, said, “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.”

Mr Sudip Bandyopadhyay, Director, NMCE, said more than 70 per cent of coffee produced in India is exported to over 50 countries accounting for $458.18 million (Rs 1,907 crore) 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,” he added.

Mr Kailash Gupta, Managing Director, NMCE, said NMCE is the only national commodity exchange to launch Robusta Cherry EP Bulk Coffee contract which would enable planters and small traders to hedge their entire produce as compared to earlier contracts which were for smaller percentage of AB quality.

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