Windfall likely at LCE

THE LONDON Commodity Exchange, home of the capital's agricultural futures markets, looks on track to give rebates to members when the financial year ends in March.

Such a step would mark a dramatic reversal in the fortunes of the exchange, which narrowly returned to profit in 1992 after three years of losses.

The finances of the LCE, formerly called London Fox, suffered until last year from lack of direction, a property futures trading scandal in 1991 which caused the resignation of its chairman and chief executive and a long decline in commodity prices and volumes.

Robin Woodhead, chief executive, could not confirm whether rebates would be possible in March. But he said several factors had produced a turnround in the exchange's finances.

In 1992 the LCE reduced overheads by one-third, cutting costs and shedding 40 of its 120 employees. It made a pounds 218,000 pre-tax profit after a pounds 646,000 loss in 1991.

This year some commodity prices have increased, including those of the exchange's leading cocoa and coffee contracts.

In October, LCE volumes - the number of contracts traded - increased by 30 per cent from the previous October and open interest jumped by 65 per cent. 'The growth has come from greater producer and trade interest as market prices have come off their floor,' Mr Woodhead said.

Rebates to exchange members are a way of reimbursing them in times of profit for membership and other fees they have paid to keep the exchange running. The LCE has not used them for that purpose for at least three years.