SMX to launch first global pepper futures contract - What is your opinion ?

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SINGAPORE September 28, 2010(Commodity Online):

Singapore Mercantile Exchange (SMX) has announced it will launch world’s first international Black Pepper Futures Contract (Contract Symbol: SMPEPPER) platform with physical delivery-based settlement, as its first agricultural commodity derivatives product.

SMX has obtained approval from the Monetary Authority of Singapore (MAS) to list SMPEPPER on its trading platform. SMX is at present working with relevant industry partners to create awareness about the new Contract, while collecting their feedback to streamline the physical settlement procedure.

Mr. Thomas J. McMahon, Chief Executive Officer of SMX,commented: “Exhaustive
research and close consultation with key industry players is one of our primary objectives. This latest contract constitutes noteworthy fruition of such efforts.”
“We are listing the most commonly traded grade of Black Pepper, from discussions and partnerships with key exporters and importers both on a regional and global basis. Trading hours will span all major markets, providing exciting opportunities for price discovery leading to global benchmarking. Managing price volatilities is a very crucial factor in agricultural products such as Black Pepper, where markets are unpredictable.

The marketplace seems excited by this latest development, and on our part
agriculture commodity derivatives is a key segment for expansion,” Mr. McMahon added.
Mr. Vijaykumar Iyengar, Managing Director of Agrocorp International Pte
Ltd, said: “Over the last two decades we have witnessed Vietnam overtake India as the world’s largest producer and exporter of Black Pepper. Overall the key producers are still in Asia, while the larger consuming nations are in the West. Such listings by SMX essentially bring all market players to the same table, ensuring efficient price discovery.”

Mr. Do Ha Nam, Chairman of the Vietnam Pepper Association, said: “Having a Black Pepper futures contract would give rise to natural price discovery which would benefit the entire value chain participants of Black Pepper.”Source: Commodity Online


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