NMCE's delivery of July coffee robusta at 456 t

National Multi-Commodity Exchange of India's (NMCE) July Coffee Robusta futures contract saw 456 tonne delivery against 18,264 tonne offered for sale.

Also in the July 2005 series, NMCE witnessed physical delivery of 625 tonne in pepper against 23,280 tonne offered for sale, 952 tonne in rubber against 53,324 tonne offered and eight quintals of cardamom out of 14,394 quintals offered for sales.

As for the percentage of physical delivery of total volume offered in July series of respective commodities, pepper saw 2.68 per cent, rubber 1.79 per cent and coffee Robusta Cherry AB 2.50 per cent.

Therefore, physical deliveries of total 9,199 tonne of pepper, 12,424 tonne of rubber, 1,071 quintals of cardamom and 456 tonne of coffee Robusta Cherry AB have taken place in NMCE with the launch of the respective commodities in futures trading.

In the first contract of coffee Robusta May 2005, the entire outstanding positions got liquidated by the clients themselves by entering into offsetting contracts.

However, in the July contract a large open position of 456 tonne remained outstanding at the expiry of the contract.

As NMCE provides for mandatory physical delivery of all open positions on expiry of the contract, in order to ensure smooth delivery and resolve issues relating to quality and logistics, meetings of prominent clients, members, Central Warehousing Corporation officials and Coffee Board officials were held from July 7, said Kailash Gupta, MD, NMCE.

However, the delivery process could be completed only by July 21 and the warehouse receipts were issued by CWC.

Similar hiccups were encountered during the first few delivery months in the case of rubber before the system was streamlined with the help of the Rubber Board.

Commenting on the July 2005 series, Gupta, said, "We have ascertained from the international market that the prices of coffee are stable from July 19 (which was the pay out date) till July 21 and the exchange has decided to compensate buyers for 2 days by paying compensation at the rate of 36 per cent per annum for 2 days of delay in streamlining the process.