NMCE to open more coffee delivery centres

After completing one year of futures' trading in coffee, National Multi-Commodity Exchange Of India (NMCE) plans to increase the number of delivery centres for coffee in the country to grow the business.

Beginning crop season 2005-06, NMCE plans to open and operate delivery centres at Kochi in Kerala and Kushalnagar in Karnataka. Presently, NMCE operates from CWC warehouses in Bangalore for Arabica and Kozhikode for Robusta.

"After touring the coffee growing regions and interacting with growers and traders, we felt that centres will help grow the volumes in futures trading," Kailash Gupta, managing director,NMCE told Business Standard.

"Last year, in July 2005, there was much hue and cry regarding NMCE?s July 2005 delivery quality and logistics-related issues. This is being addressed by opening new delivery centres to take care of the new season's trading," he added.

After one year of its operation, NMCE has delivered 600 tonnes of the total volume of 2.50 lakh tonnes transacted in futures trading in coffee.

Sharing NMCE's one year experience in coffee futures trading, Gupta said, "Just like in case of other active commodities, NMCE did face some initial hiccups in case of coffee Robusta and the delivery process was completed by July 21."

"During the year, NMCE received overwhelming response from all the market participants. In addition to that, NMCE cornered a major pie of the coffee futures trading volume," he claimed.

NMCE embarked on awareness initiatives in the coffee-growing regions of Karnataka, Kerala and Tamil Nadu to aggressively promote online coffee futures by involving more growers and traders.

According to Gupta, "Coffee being the highest traded commodity on the Indian exchanges, it made sense for us to begin the initiative with one specifically focussed on coffee growers."

"Curing is done on a large scale in Karnataka and we believe that such awareness programmes are key to increasing the penetration of commodity trading in India, besides empowering end-users to make the best decisions," he added.