BM&FBOVESPA launches new commodity derivatives for the sugar/ethanol sector
São Paulo, January 28, 2013 – BM&FBOVESPA begins trading today new commodity derivatives developed for the sugar/ethanol sector. The first of these is the cash-settled crystal sugar futures contract. The contract is authorized for trading from 9:00 a.m. to 2:00 p.m. (São Paulo time), with after-hours trading from 2:35 p.m. to 6:00 p.m., under ticker symbol ACF and as of the April 2013 contract month. Each futures contract is quoted in Brazilian Reals and the contract size is 508 50-net kilogram bags.
Call and put options on the cash-settled crystal sugar futures contract will begin trading tomorrow (29). These are American-style options which can be exercised at any time. The unit, ticker, trading times (excluding after-hours) and contract months of the option contracts are the same as for the futures contract. The crystal sugar contracts prices the product delivered at the port of Santos in the state of São Paulo, for domestic consumption and for export, and will be settled based on the Santos (SP) BM&FBOVESPA Crystal Sugar Price Index.
New anhydrous fuel ethanol
As of today trading shall also be authorized in the new anhydrous fuel ethanol futures contract, with physical delivery. The contract is authorized for trading from 9:00 a.m. to 3:20 p.m. (São Paulo Time), after-hours trading from 4:05 p.m. to 6:00 p.m., under the ticker ETN and as of the May 2013 contract month. Each futures contract is quoted in Brazilian Reals and the contract size is 30 cubic meters (30,000 liters). The contract price formation will be based on prices from the Paulínia region (São Paulo state), which is the largest fuel distribution hub in Brazil.
Complete portfolio of sugar-energy commodities
The launch makes BM&FBOVESPA into the first exchange in the world to offer the productive sector a complete portfolio of sugar-energy commodities with three complementary contracts: cash-settled crystal sugar, anhydrous fuel ethanol with physical delivery and cash-settled hydrous ethanol.
The BM&FBOVESPA initiative represents an advance for the sugar and ethanol production chain in Brazil. As of now the agents in these markets will be able to execute hedge and arbitrage strategies between the three contracts in local currency and on a single electronic trading platform.