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Raw coffee trading kicks off on COFEI

The Coffee Futures Exchange of India, or COFEI, began trading in raw coffee, by the auction system, in Bangalore on Thursday. This is said to have happened for the first time in the world.

On the first day, around 117 lots of 1 metric tonne each and valued collectively at Rs 7.5 million, were traded at the exchange. According to COFEI president Ashwin Shah, the first delivery of four lots will take place in the first fortnight of July.

"Auction took place in both the varieties of Arabica parchment as well as Robusta cherry grades with prices quoted for 50-kg bag each. The buyers were from all over the country. The trading took place for the monthly contracts of July, September, and November of the current year, and January, March, May, July, and September of next year," COFEI business manager Narayan Bhat said.

Though the margins were fixed at Rs 400 per bag of the Arabica variety and Rs 200 per kg for the Robusta variety, trading was limited to half of the ceiling price with room for fluctuations. The delivery of raw or graded bulk, however, has been left to the choice of the seller.

Having launched the auction in the traditional 'outcry' system successfully, the exchange is gearing up to introduce it in the form of online trading from the first week of July.

Even as coffee prices during the current year have been on the down swing leading to piling of the stocks, the industry is expecting yet another bumper crop at the year-end with an estimated production of around 300,000 tonne.

India exports about 70 per cent of its coffee produce, but the domestic consumption continues to stagnate.

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