Coffee Board plans safety net for hedging
Commodity Online BANGALORE: India’s Coffee Board is planning to launch an instrument to help growers to hedge their market-related risks.
Coffee Board Chairman G V Krishna Rau said that the proposed plan will act as a safety net and a stabilising force in coffee trading.
“We are working out some mechanism to provide an instrument to farmers to be able to use it as hedge,” Rau told reporters here.
He said the Board plans to implement such a mechanism by the end of the current financial year.
He said the Board is in dialogue with commodity exchanges on the matter. “Since it has to be market-related intervention...therefore, the exchanges etc will have to come into play. We are in dialogue with them,” Rau pointed out.
“If we are able to provide this sort of instruments to the growers to hedge their risks - whether it's weather-rel ated risk or market-related risk - to a large extent, these should give stability in the long term,” he added.
Meanwhile, India's 2007-08 coffee crop is projected at 291,000 tonne, up 1.04% from the post-monsoon estimate for the previous crop of 288,000 tonne for 2006-07. Arabica crop is projected at 100,750 tonne (up 1.05% from the 2006-07 level of 99,700 tonne). Robusta crop is projected at 190,250 tonne (up 1.4% from the 06-07 level of 188,300 tonne).
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