“We queried many different segments of the wood pulp industry and the investment world, and have discovered a keen interest to develop this risk management product for the growing world pulp market,” said Frederick W. Schoenhut, Chairman of the New York Board of Trade. “The pulp industry previously relied on a combination of over-the-counter arrangements to mitigate price risk, but with a complex marketing chain and competing price goals, a widening circle of industry participants who produce or consume wood pulp will now have a place to turn to for reliable, independent and secure price discovery and price risk transfer.”
Wood is the source of 90% of global pulp production, with the other 10% coming from natural products and recycled paper. Canada, the U.S., and the Nordic countries are the largest producers of pulp.
The new contract will be for 20 air-dry metric tons of Northern Bleached Softwood Kraft (NBSK) pulp, which must be a commercially accepted “prime” grade of a specific moisture, dirt count and brightness. Pulp Futures contracts, priced in U.S. dollars, will be listed for February, April, June, August, October and December months, with April 2005 the first contract to be listed. Full contract specifications will be available at www.nybot.com in January 2005.
The New York Board of Trade (NYBOT) is New York’s original futures exchange, where the world trades food, fiber and financial products. For well over a century, the New York Board of Trade has provided reliability, integrity and security in a global marketplace for cocoa, coffee, cotton, ethanol, orange juice and sugar, as well as currency and index futures and options. Information about the New York Board of Trade can be found at www.nybot.com and www.nybotlive.com.
