Coffee exchange to launch forward trading soon

The Buon Ma Thuot Coffee Exchange Center, or BCEC in short, will launch forward trading operation next month alongside spot trading, providing more trading options for both traders and farmers, said the center’s director.

Nguyen Tuan Ha told the Daily on Thursday that preparations are underway for introducing the modern trading method in line with international practices as seen on the London exchange or New York exchange for the commodity. Under the new method, contracts are signed for future deliveries at a given price.

Ha said the center in the Central Highlands province of Daklak once launching the new service would meet diverse demands of coffee traders for long-term trading. The new service will also help standardize the local coffee market and minimize the time needed in making deliveries for importers.

In October last year, Daklak Province authorities established a steering committee for launching the forward trading operation on the coffee center. Currently, BCEC and relevant agencies have agreed on regulations for forward trading, forward contracts, settlement and deliveries.

BCEC is testing the software system designed to support forward trading and systematizing regulations for the new trading method.

BCEC, which was inaugurated in December 2008, has so far mainly supported spot trading besides other traditional services like warehousing and quality checking for coffee traders. The center currently has 21 enterprises registered as trading members and 40 farmers and agents registered as sales members.

Tags: Vietnam agriculture, Vietnam Coffee, Vietnam coffee exchange