World's First Global Black Pepper Futures Contract To Go Live On SMX On Feb 10

By Tengku Noor Shamsiah Tengku Abdullah SINGAPORE, Feb 3 (Bernama) -- Singapore Mercantile Exchange (SMX), the first trans-Asian multi-product commodity and currency derivatives exchange, today announced the launch date of the world's first global Black Pepper futures contract. The contract will go live on Feb 10, 2012 and also mark SMX's first agricultural commodities futures contract aimed at creating a new global benchmark for a commodity predominantly produced and exported from the Asia Pacific region to the West. Vietnam dominates the world's black pepper market, being the largest producer and exporter of the commodity with 33 per cent and 43 per cent global share respectively, and thus features as the basis delivery centre of the SMX futures contract. The basis grade is origin neutral 550 g/l black pepper, considering Indonesia, Malaysia and India are also major exporters of the commodity. SMX also announced the historic launch at the Asian Commodities Convention–Agri Chapter here today. The convention which was presided over by Olam International Ltd chief executive officer, Sunny Verghese, was attended by a host of commodity futures traders and market participants. Commenting on the futures, Verghese said the launch of the first global black pepper futures contract on SMX would be an important and pioneering milestone for price risk management and will benefit producers, traders and consumers alike. Through a transparent trading mechanism on the exchange platform and a reliable clearing and settlement mechanism facilitated by the clearing corporation, the contract should attract active global participation and act as a global price benchmark over a period of time, he said. The trading unit will be five metric tons and delivery unit will be 15 metric tons net weight (equivalent to three futures contracts). Trading shall be conducted in all the calendar months. At a time four consecutive contracts months including current contract month will be available for trading. Meanwhile, SMX CEO, V Hariharan said the new futures contract to be launched by the exchange had undergone a rigorous industry validation process over the last two years. "We are confident that this first agri commodity futures contract on the exchange will be well accepted by the physical trading community. "Going forward we expect to offer more such Asia centric products to facilitate price discovery and price risk management during the Asian time zone.” SMX trading session spans Asian, European and American business hours, with central counterparty clearing performed by SMXCC. -- BERNAMA