Latest News | Commex NCDEX to Re-launch Coffee Futures Contract

Mumbai, Sep 29 (PTI) The National Commodity and Derivatives Exchange (NCDEX) on Thursday said it will be relaunching coffee futures contract from Friday.

Initially, monthly contracts (on Robusta cherry AB coffee) for expiry in February, March and April 2023 will be made available for trading from the re-launch date, the exchange said in a statement.

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Though the exchange did not offer a reason as to why it is reentering the segment, it could be surmised that coffee demand and the resultant spike in prices could be a reason.

The exchange had discontinued coffee futures way back in 2009 after entering it in April 2005. The discontinuation was due to the fact that the exchange did not renew the licence.

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The contracts will be a compulsory delivery contract and deliverable at Kushalnagar in Karnataka, Arun Raste, the managing director and chief executive of the bourse said, adding the contracts being launched will enable growers to hedge their price risks, individually and collectively.

The contracts will have a daily price limit of 6 per cent (4+2 per cent), which means once the price reaches a 4 per cent cap on either side the trading will be halted for a cooling period of 15 minutes, after which another 2 per cent movement can be allowed on the same side until the end of the session. The lot size is fixed at 1 tonne in line with physical trade in the commodity.

Globally, coffee is one of the top traded soft-commodity contracts. As the country exports over 60 per cent of the produce, the indigenous coffee futures contracts will prove to be a boon for exporters.

With around 3.50 lakh tonne per annum, India accounts for 3.5-4 per cent of the global coffee production pegged at around 10 million tonne.

Karnataka accounts for nearly 71 per cent of the total production, followed by Kerala at 21 per cent and Tamil Nadu at 5 per cent. Nearly 65 per cent of the output is exported.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)