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On Tokyo Grain Bourse '05 Coffee Futures Volume +32.5%
Market participants stepped up purchases on expectations of a drawdown in global coffee stocks, particularly Robusta, said an official with the exchange. Reflecting that sentiment, trading volume for Robusta futures in 2005 jumped 55% on year.
Output from the world's two top coffee producers - Brazil and Vietnam - during the 2004-05 coffee season shrank, as a result of a biennial downturn in output, reduced caretaking and adverse weather conditions.
Supply disruptions from the aftermath of a series of hurricanes that hit the U.S., along with an uptrend in the London coffee futures market and a weaker yen against the U.S. dollar, also encouraged trade, the official said.
Arabica accounts for 70% of Japan's total coffee imports and is the second-largest futures contract traded on the exchange.
Other futures contracts traded on the exchange include corn, soybean meal, non-GMO soybean, azuki bean and raw sugar.
Trading volume for Arabica coffee futures stood at 5,591,946 lots in 2005, compared with 4,293,422 lots in 2004.
In 2005, 662,994 lots were traded in the Robusta coffee futures contracts, up from 427,466 lots the previous year.
Robusta futures contracts are usually traded in smaller volumes.
Coffee futures traded on the exchange include produce from India, Indonesia, Thailand, Vietnam and Latin America.
According to the official, since last year, interest in commodity futures markets in Japan has increased, particularly among asset management firms, and the number of market participants are expected to go up this year.
Participants who take positions on the market consist of individual speculators, commodities trading advisors and fund traders mainly from Japan, Hong Kong, Singapore and the U.K. but the bulk of the trade volume is still generated by Japanese participants, he said.
Japan is the world's third-largest coffee drinking nation, behind the U.S. and Germany.
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