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Losing battle with ICE: CME Group suspends trading in European cocoa contracts

Douglas Yu

By Douglas Yu+

25-Jan-2017
Last updated on 25-Jan-2017 at 12:56 GMT2017-01-25T12:56:33Z

CME euro-denominated cocoa contract failed to mount serious challenge to the ICE.  Photo: iStock-iacona
CME euro-denominated cocoa contract failed to mount serious challenge to the ICE. Photo: iStock-iacona

Global marketplace CME Group will suspend trading in all its European cocoa contracts beyond April 2017.

The March 2017 contract will remain available for any interested customers, and any open interest in that contract will be unaffected.

The decision came nearly two years after the company first entered the cocoa market with physically delivered cocoa futures contact denominated in euros, ConfectioneryNews previously reported.

Never became a threat to the ICE

The contract was initially considered as an alternative to the Intercontinental Exchange’s Liffe Futures and Options (London), and ICE Futures US (New York) contracts.

CME has said the grading practices for its contracts were in line with the Federation of Cocoa Commerce (FCC), which ensures that the quality will be closer to the underlying physical market.

However, Reuters reported that the volumes and open interest of CME euro-denominated cocoa contract “remained low, and the new market never mounted a serious challenge to the dominance of the Intercontinental Exchange”.

A CME spokesperson said in a statement: “Though the initial launch of this innovative product had very strong market support, its performance decreased over time.”

“As a result, we have decided to suspend all cocoa futures and options contracts beyond April 2017.”

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