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ROMANIAN COMMODITY EXCHANGE

OVERVIEW OF ROMANIA

AGRI DEPENDENCE OF ROMANIA vis--vis Peer Countries

GEOGRAPHICAL LOCATION OF ROMANIA

TOP 5 PRODUCED AGRI COMMODITIES ( in 000 Kg)GDP : $ 169.3 billionCurrency : Romanian LeuCapital: Bucharest8th Largest country of European Union by Area7th largest populated country in European UnionContinental Climate due to proximity to seaLargest Import partners: Italy ( 12%), Germany(17%), Hungary (9%)Largest Export Partners: Italy ( 12%), Germany(17%), France (8%)Imports substantial quantity of grain

SALIENT FEATURES TRADE STATISTICS OF ROMANIACHARACTERISTICS OF ROMANIAN AGRICULTURAL TRADE Romania served as breadbasket to Western and Central Europe in the 19th century

Of Romania s total area, 28% is covered by forest and more than 60% is used for agriculture

Share of Agriculture in employment is 30% but only 12% in the GDP

Mechanization (Use of tractors) is relatively poor compared to other European nations.

Agri-food trade balance is negative (net importer) but its improving because of positive trade balance in cereals.

ROMANIAS TOP AGRICULTURE PRODUCTS

High-value agriculture trade is mainly in livestock, dairy products, horticulture products including fruit and vegetables, berries and spices, mushrooms and wine

The quality standards of Romanian Agri-products started were improved as a part of reforms to gain accession to the EU

Contract farming picked up subsequently with the heavy investments being made by companies like Smithfield Foods, Cargill, Bunge, Glencore, Lactalis and Meggle

HISTORY OF ROMANIAN COMMODITY EXCHANGENETWORK OF ROMANIAN COMMODITY EXCHANGE

TYPES OF MARKETS ON RCE CASH MARKET Started in 2006 Transactions performed by open outcry on the floor or electronic tradingCan only be accessed through brokerage companies

AUCTION MARKETStarted in 1992Supports both spot and forward marketMainly executed via trading floors

RECIEVABLES MARKETRecievables are traded via dutch auction open outcry methodSEGMENTATION OF TRADING FLOORS Financial Market Floor Launched in November 1998 Highest volume in Dollar RCE contract Oil FloorTraded commodities are Oil, Gasoline, fuel oil, heavy fuel oil Grains FloorAgricultural products such as wheat, corn, rye are traded

FUNGIBLE COMMODITIES TRADED ON RCEClassified list of fungible commodities are as follows :Farm products andagro product productsFood industryproducts, beverages and tobaccoLive animals and animal productsForest productsPowerproducts of the mining industryNon-Powerproducts of the mining industryProducts of themetal working industryProducts of thetextile industryProducts of thepulp and paper industryProducts obtained byrefining oilProducts of thechemical industryRubberindustryNon-metallic oreproducts TRADE MECHANISM IN CASH MARKET ON RCE

CONTRACT SPECIFICATIONS ON RCEParticularsDetailsNameEnergy Lighting Peatra NimtRingPowerAssetElectric powerContract date7-Sep-13Settlment date7-Oct-13Quantity3400 MwhParticularsDetailsName499/2013 Gas RomanRingNatural gasAssetNatural gasContract date10-Aug-13Settlment date10-Oct-13Quantity4100 cubic meterParticularsDetailsName513/213 gas oilRingPetroleum productsAssetGas oilContract date9-Sep-13Settlment date9-Oct-13Quantity55000 ltrs CONTRACT SPECIFICATIONS ON RCEParticularsDetailsNameEnergy Lighting Peatra NimtRingPowerAssetElectric powerContract date7-Sep-13Settlment date7-Oct-13Quantity3400 MwhParticularsDetailsNameEURO/RCETick Size1 ROL/EurTrading Unit1000 EuroDeliveryCash Last Trading Day3rd Tuesday of the monthParticularsDetailsName499/2013 Gas RomanRingNatural gasAssetNatural gasContract date10-Aug-13Settlment date10-Oct-13Quantity4100 cubic meterParticularsDetailsName423/2013 Titanium FerroRinggeneral prouductsAssetoresContract date22-Aug-13Settlment date22-Oct-13Quantity103582 KgParticularsDetailsName513/213 gas oilRingPetroleum productsAssetGas oilContract date9-Sep-13Settlment date9-Oct-13Quantity55000 ltrsEndorsement by the Romanian Government of the Government Decision No. 54/ February 3, 1993 "regarding the price settlement of the Exchange transactions which prices are to be negotiated under the supervision of the local central public administration authorities -- RCE integration within the economic activity in 1993

Issuance of the first legal framework on commodity exchange field: "Ordinance regarding the Commodity Exchanges", no. 69/1997, -- Commodity Exchange development in 1997

Law no. 357/2005 granted the commodities exchanges the fundamental right to manage markets of public interest by self-regulatory measures -- Regulated the operation of Romanian commodities exchanges under the authority of the Steering Committee of the Chamber of Commerce and Industry of Romania in 2006

Role of Romanian Government