S'pore starts coffee futures

S'pore starts coffee futures

SINGAPORE (AFP): The Singapore Commodity Exchange (Sicom) launched yesterday a global coffee futures contract to serve Asia's growing market for the commodity to hedge prices within the region's time zone.

Sicom's Robusta Coffee Contract would fill up the time gap between New York coffee market's close and London market's opening, officials of the exchange said.

Coffee is the second biggest commodity in money terms after oil.

Foreign coffee traders said that introduction of the contract in Singapore was appropriate now in view of Asia's growing Robusta production potential.

Asia accounts for about 15 percent of world coffee production. Up to 45 percent of the region's coffee is of the Robusta type.

Indonesia is the largest producer of coffee in the region, followed by Vietnam, Papua New Guinea and the Philippines.

To help kick-start the coffee contract, Sicom has declared an outright discount of 50 percent on the clearing fees be given for all corporate coffee trades for a period of six months from yesterday.