European cocoa industry participants who complained last week about speculation in the London cocoa futures market are to discuss their concerns with the exchange operator, Liffe.
The head of the German Cocoa Trade Association, Andreas Christiansen, said: "They have written to us saying they are willing to discuss this with us privately. We were told that the current situation is technically correct and that Liffe is aware of the points we have raised."
Sixteen European cocoa industry participants sent a letter to Liffe last week saying the extent of speculation on the London cocoa market could drive them towards using the US-based Intercontinental Exchange. Dealers said fund buying was the key driver behind London cocoa futures hitting a 32-year high of £2,461 a tonne earlier this month.
At this time of year, market focus turns to the development of crops in West Africa, the dominant global cocoa-producing region. Dealers said that while long-term structural decline in the output from the world's largest cocoa producer, Ivory Coast, supported high prices, speculative fund buying had left the Liffe market looking overvalued.Reuse content