8.7.2-FUTURES MARKETS-SEPARATE CONTRACTS FOR SPOT AND FUTURES
Separate contracts for spot and futures
The contract size (100 bags of 60 kg each, meaning it is accessible also to smaller growers), clearly demonstrates that BM&F operates in a producing country.
The spot contract trades physical coffee:
type 6 or better, hard cup or better, graded by BM&F and stored in licensed warehouses in the city of São Paulo. Prices are quoted in Brazilian reals per 60 kg bag and all contracts must be closed out at the end of each trading day. This contract is aimed at operators in the local market: Brazil is not just the world’s largest producer – it is also the world’s second largest consumer of coffee.
The arabica futures contract trades seven positions:
March, May, July, September and December plus the next two positions of the following year. Basis: type 4-25 (4/5) or better, good cup or better, classified by BM&F, with prices quoted in US$ per 60 kg bag. Delivery may be made in BM&F licensed warehouses in 29 locations in the states of São Paulo, Paraná, Minais Gerais and Bahia (deliveries outside the city of São Paulo incur a deduction for freight costs). Using United States dollars facilitates linkage with the export market.
The robusta conillon spot
trades physical coffee type 6 or better, screen 13+, for delivery in licensed warehouses of Victoria.
The robusta conillon futures contract
, introduced in May 2003, trades in the following positions: January, March, May, July, September and November.
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