S'pore coffee contract targets Japan

S'pore coffee contract targets Japan

TOKYO (AFP): The Singapore Commodity Exchange (Sicom) said
yesterday it was "confident" of attracting interest from the
Japanese coffee and futures industry in Asia's first coffee
futures contract to be launched next week.

David Chin, first deputy chairman of the exchange, said
potential users in Europe, the United States, Indonesia and
Singapore had already given a "very encouraging" response to the
contract, which starts trading on Wednesday.

Speaking at a seminar to promote the new contract, Chin also
said that Sicom had identified cocoa, sugar and non-ferrous
metals such as aluminum, copper and zinc as commodities with
future potential for trading at the exchange.

"Our mission is to become a premier price-discovery center for
commodities in the Asian time zone," he said. "Asia-Pacific is a
dynamic region and Sicom hopes to contribute to this region by
enhancing Singapore as a trading place, a market place and a
meeting place for a wide range of commodities."

Sicom, established three years ago, currently trades four
contracts based on different types of natural rubber.

The Tokyo Commodity Exchange also has a rubber contract but
like other exchanges in Asia has no coffee contract, forcing
producers, consumers, dealers and speculators in coffee to use
the major markets in London and New York.

During its six-day mission to Japan, one of the world's
biggest coffee consumers, the exchange said it was meeting with
13 local companies including coffee roasters UCC Ueshima Coffee
KK and Ajinomoto General Foods Inc. Others include the country's
five big trading houses and major futures brokers.

Chin, who is also deputy chief executive of the Singapore
Trade Development Board, said the robusta coffee contract had
been "finetuned" following feedback from potential users during
marketing missions to Switzerland, Germany, Britain, the United
States and Indonesia in December and January.

The contract size is 10 tons and quotations are in dollars per
ton with a minimum price fluctuation of one dollar.

The exchange has also set position limits of 2,000 lots while
anyone holding more than 500 lots has to furnish a special report
to the exchange.

Deliverable coffee from Asia includes robusta grown in India,
Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Other acceptable origins are Angola, Brazil, Cameron, the
Central African Republic, Ecuador, Ghana, Guinee, Cote d'Ivoire,
Liberia, the Malagasy Republic, Nigeria, Sierra Leone, Tanzania,
Togo, Trinidad, Uganda and Zaire.