| 20 Feb 2008 |
|
Dubai wants to launch world's first tea futures contract
- Text size
20 February 2008
Dubai: Dubai wants to launch the world's first tea futures contract if it finds favourable response among major tea producers and other key industry participants, officials said on Tuesday.
They argued that international tea trade will benefit from a "well-functioning futures market" as it would provide a good pricing guidance for the commodity.
"If there is a possibility of a successful tea futures contract, then Dubai might be the place for it since we are ideally positioned between the tea producing and major consuming countries," Dubai Multi Commodities Centre chief executive officer David Rutledge told Gulf News.
However, experts said it would not be easy to create a benchmark for a tea futures contract because of the wide variety grown in various countries.
"We have 24 different types of tea in Sri Lanka. If you want to have a futures contract, how do you create a standard?" said Sri Lanka Tea Board director general H.D. Hemaratne.
He said a forward contracts system in his country had not been successful because of a lack of participation from key industry players.
"Brokers and producers would not participate in a futures market if there is a trend of rising prices, and buyers would not enter the market if there is a price declining trend," Hemaratne told Gulf News.
Rutledge himself acknowledged that establishing a description of tea that can be used as a benchmark would be difficult. He said other teas could be delivered at specified premiums and discounts around that agreed standard description.
There has been no tea futures contract developed till date because of a lack of initiative linking Indian Ocean producers and other tea growing countries, he said. New York has thought about such a contract but Dubai believes it is better placed to start a tea futures market because its strategic geographical location.
"If someone is going to do it, [then it should] better be in this part of the world," Rutledge said.
"We want feedback whether it is something that is acceptable to the industry. If it is the need of the market then we want to be the first to do it," Sethi said.
By Shakir Husain
© Gulf News 2008. All rights reserved.
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Loading ...
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.