|
Coffee futures trading launched
The Dak Lak-based Buon Ma Thuot Coffee Exchange Centre on Mar. 11 launched futures trading. Futures contracts are entered into at a price decided on trading day but for future delivery and payment.
Unlike the London or New York coffee trading floors, this is a local floor that has simple rules while at the same time insuring coffee transactions against global price fluctuations.
Traders confirm their positions (Loss, gain) through the centre's daily report, which will enable them to cut their losses or make timely profits.
Tran Ha, director of the centre, said futures contracts would be made in dong between 2pm and 5pm every day with a market lot being two tonnes.
At the completion of its current trial run soon, the centre – which launched spot trading in December 2008 – would apply to become a coffee exchange.
Deputy Minister of Industry and Trade Ho Thi Kim Thoa said Dak Lak accounted for half the nation's coffee production while 10 big local coffee producers are headquartered or have branches in the province.
"This has created favourable conditions for advanced coffee transactions at the Buon Ma Thuot Coffee Exchange Centre."
Thoa asked the provincial People's Committee to continue to support the centre through trade promotion to attract more investors and customers.
Tran Hieu, Chairman of the Committee, said: "Nearly 2 million people in Viet Nam earn their living from coffee, which is affected not only by the weather and diseases but also, largely, on global prices and supply and demand."
Viet Nam produces 1 million tonnes of coffee a year and has export revenues of almost US$2 billion.
When world coffee prices fell, farmers often had to accept low prices when transactions were done in the traditional manner, he said.
"Launching futures trading … will therefore facilitate production, trading and import-export by the coffee industry."
This kind of trading would help investors profit and reduce costs and act as a hedge against risk when prices fluctuated, he added.
The Buon Ma Thuot Coffee Exchange Centre was set up in 2006 to avoid costs for middlemen in coffee trading, create a direct and effective trading environment for producers and traders, and help the stable development of the country's coffee industry.
vietnamnews
|
