Conilon (Robusta) Coffee Futures

Informative

Launch of Conilon Coffee Futures Contract

Brazil has become a major player in the international market for Conilon (or Robusta) coffee, grown mainly in the state of Espírito Santo, but also grown in other regions of the country. In 2023, 16.17 million bags of this species of coffee were harvested, the third largest harvest in history.

Up until now, there was no hedging instrument available against price fluctuation risks in this market. To meet this demand, B3 is launching the Conilon Coffee Futures Contract.

The Conilon Coffee Futures Contract works like other commodity derivatives traded on B3, such as Arabica coffee, beef cattle, hydrated ethanol, corn, gold and soybean. These contracts are price fluctuation risk management instruments for producers, industry, trading companies, and other market participants.

As it is a contract that allows the physical delivery of the commodity, with the lots of coffee stored in warehouses authorized and classified by B3, the Conilon Coffee Futures Contract is one more alternative to sell physical coffee.

Project Tags:

Commodities

In Progress

Listed

Product benefits

Hedging

Hedging against unwanted price fluctuations

Price discovery

Reflecting global and local supply and demand and future price expectations in the physical and financial market.

Origination

Alternative for selling physical coffee with lots stored in warehouses authorized and classified by B3

Liquidity

Market makers work to ensure minimum on-screen liquidity.

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Futures, Options and Rollover contracts of Conilon (Robusta) Coffee, with the underlying asset of the contract stipulated in 100 bags of Conilon (Robusta) coffee, type 7/8, mill run, ex-Vitória Port, Espírito Santo State, and traded in Brazilian Reals per bag.

Grown mainly in the state of Espírito Santo, but also in other regions of Brazil, the Conilon (Robusta) green coffee is an essential raw material for the roasted and ground coffee and soluble coffee industries. Around 70% to 80% of Brazilian production is consumed domestically. Furthermore, Brazil has become a key player in the international market for this species, currently occupying the position of second largest producer behind only Vietnam.

Conilon coffee contracts are traded in Brazilian Reals (BRL), thus facilitating transactions for producers and other players in the domestic market.

Underlying: Green coffee beans produced in Brazil, coffea canephora variety, type 7/8 (7-35) or better, to be delivered in the city of Vitória, State of Espírito Santo, Brazil.
Quotation: Brazilian Reals (BRL) per 60-kilogram bag.
Contract size: 100 bags weighing 60-net kilograms each (corresponding to 6 metric tons).
Contract months: January, March, May, July, September, and November.
Expiration date: 6th business day preceding the last trading day of the contract month.
Settlement on expiration: Physical delivery.

Coffee beans with a ragged appearance, looking wet, muddy, poorly dried or moldy shall not be delivered. The color must be uniform and have the same characteristics as current or immediately previous harvests. Furthermore, the lot must have a minimum 10% retention on at least four sieves and have a humidity level of 11 to 13%.