SINGAPORE (Commodity Online): Singapore Exchange (SGX) is all set to create an Asian benchmark price for robusta coffee as the exchange is mulling to launch futures trade in a new robusta coffee from April 22 so as to capitalize on Southeast Asia’s top market status for the commodity.

According to Jeremy Ang, CEO of Singapore Commodity Exchange (SICOM), “SICOM coffee is set to play a key role in establishing an Asian benchmark price for robusta coffee.” SICOM is a unit of SGX. Robusta, primarily produced by Vietnam, is either blended with arabica beans for a lower-cost brewed coffee or processed into instant coffee.



Commenting on the launch, Ang said, “The launch of SICOM Coffee is timely, as Southeast Asia has grown to become the largest producer and exporter of robusta coffee.” London robusta futures are currently the benchmark for robusta coffee, however, is a physical delivery futures contract traded in five metric tonnes per lot of robustas. SICOM had said it planned to launch coffee and gold contracts in the first half of 2010.

Delivery will be made via warehouse receipts representing coffee stored in bonded warehouses in Ho Chi Minh City in Vietnam or Singapore, said the exchange, adding that trading hours are from 10 am to 12 noon (0200 to 0400 GMT) and from 4 pm to 11 pm (0800 to 1500 GMT).

London's May robustas LRCK0 gained USD 19 and closed at USD 1,267 per tonne on Thursday. It tumbled to contract low of USD 1,212 on Monday due to a firmer U.S. dollar.

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