MCX registers record coffee delivery in March

The Multi Commodity Exchange (MCX) has witnessed record coffee delivery in India at 120 tonne for its March Robusta Coffee contract expired on March 30. This is a record physical delivery in the domestic coffee futures.

"The overwhelming response for its coffee futures has set a trend in Indian coffee sales where buyers and sellers are more enthusiastic than ever before," a Bangalore-based trader said.

Launched on January 29 this year, Robusta Coffee contract on MCX has become a favourite among commodity traders across the country, especially from Karnataka.

Traded between 10 am and 11.55 pm, Robusta coffee contracts coincide with the international market timings, since coffee is a global commodity with global reference pricing.

Coffee futures on MCX are traded based on globally referenceable Euronext.liffe price as the benchmark. The MCX price is thus a reference price for the domestic traders and exporters.

The final settlement price of MCX is linked to the Euronext.liffe price, giving the traders the advantage of global benchmark price.

The contract is unique in several ways as this is the first agri commodity in India wherein evening trading is permitted. The contract, barely two months old, has attracted large market participation and the confidence of physical market participants.

MCX Robusta coffee has four delivery centres, three in Karnataka ""Kushalnagar, Chikmangalur and Hassan, and one in Kerala "" Kalpeta, where National Bulk Handling Corporation (NBHC) maintains a warehouse for coffee industry participants trading on MCX. The contract has attracted good interest from the Indian coffee industry.

The delivery period of the March 2007 contract began on March 1 and the last trading and delivery date was March 30.

The maximum allowable position limits for members and clients in the commodity is 2250 MT and 750 MT respectively. However, in the tender and delivery period, the maximum allowable position limits are reduced to 450 MT and 150 MT for members and clients respectively.

The one month delivery period overcomes logistic problems pertaining to bulk handling and storage. There is a provision that once a seller's stock is validated by the exchange, actual delivery can take place on any of the tender days as per the seller's choice. All open positions at the end of the contract expiry, result in compulsory delivery.