SICOM robusta coffee exchange set to open

The Singapore Commodity Exchange (SICOM), a subsidiary of Singapore Exchange (SGX), will launch its Robusta Coffee Futures Contract (SIC OM Coffee) exchange tomorrow, SICOM’s CEO Jeremy Ang said yesterday.

Ang said the advantages of the exchange included helping discover benchmark prices for commodities traded, produced and consumed in Asia.

“The launch of SICOM Coffee is timely, as South East Asia has grown to become the largest producer and exporter of robust a coffee. SICOM Coffee is set to playa key role in establishing an Asian benchmark price for robusta coffee, he added.

Angelie Koh, deputy director of the Monetary Authority of Singapore’s Financial Markets Strategy Department, said: “With Vietnam and Indonesia being the world’s two largest robusta coffee producers, there are many coffee exporters and traders based in Asia. A well-designed future coffee contract will serve as an effective risk management instrument for the coffee industry based in Asia.

Do Ngoc Quynh, the Bank for Investment and Development’s vice-deputy director of treasury, said the Robusta Coffee Futures Contract would provide investors with more choices as Vietnamese coffee producers and exporters are used to trading on Liffe or Nybot, the English and American exchanges.

“Trading on an Asian exchange will benefit Asian traders, including Vietnam as it will reflect a more appropriate price than trading on a European platform. Besides, the shorter distance compared with other exchanges will be another advantage for Vietnamese coffee producers and exporters,”

SICOM Coffee is a physical delivery futures contract, traded in five metric tonnes per lot of robusta coffee. Trading hours are from 10:00 a.m. to 12 noon and from 4:00 p.m. to 11:00 p.m., covering both Asian and European hours. Delivery will be made via warehouse receipts representing coffee stored in bonded warehouses in HCM City, Vietnam or Singapore.

The Saigontimedaily

Tags: SICOM robusta coffee exchange, Vietnam Coffee