The first global forward futures contract launched by Singapore Mercantile Exchange (SMX) on February 10, 2012 could become a competitor to the Indian futures market.
At present, India's Malabar Garbled pepper is a global standard but the scale may be inclined to Vietnam, where new exchange is concentrated, if Vietnam attracts more participants, exporters and trader said.
The price of pepper at the Indian National Commodity Exchange (NCDEX) is recognized by other pepper producing countries. However, the new trading platform with higher liquidity could change its influence because Vietnam is the largest pepper producer and exporter in the world.
On the new exchange, the delivery will be via a bonded warehouse in Vietnam. “If Vietnam can attract more participants and enhance liquidity, the global pepper futures market can be successful. Because part of the transaction ends at the delivery stage, speculation can only grow with high liquidity, ”said Philip Kuruvila, a spice exporter and former chairman of the Exporters Forum. Indian taste. But the question is whether Vietnam has enough experience in term trading.
“They will trade in black pepper grade 550 Gr / l of any growing country. If the transaction is successful, it can become a popular commodity. The new exchange can be supported by Olam International, headquartered in Singapore, which has a great influence on the global spice market. It will be an advantage, ”said Kishor Shamji, a major pepper exporter and former president of the Indian Pepper and Spices Trade Association. Olam International acquired Indian seasoning company Vallabhdas Kanji a few months ago.
Greojit Comtrade, Chief Executive Officer of CP Krishnan, said the new exchange was primarily aimed at Vietnam. Indian executives can have a say if they form joint ventures with the Vietnamese government or other countries.
“We will wait and see. From a quantity perspective, Vietnam has the advantage and is also the largest exporter. But these factors do not necessarily lead to success in futures trading, ”said Vijay Kumar, sales manager of NCDEX.
The price of pepper at NCDEX is now recognized by other pepper producing countries as a benchmark to assess the market's up and down movements.
Follow PK KRISHNAKUMAR – Kochi
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