European coffee and cocoa warehouse companies discussions with ICE to modify new rules designed to prevent logjams are progressing towards a compromise, the industry association said.
In January the exchange announced changes to its cocoa and coffee grading and storage rules, which included a 60-day limit on how long warehouses can charge rent when delivery or transfer of stock is delayed.
Some warehouses were unhappy with the changes and sought to temper them.
“We have discussed with them (ICE) in a joint conference call our proposals and we are working on some clarifications and changes for different fields in the exchange’s grading and warehouse keeping procedures,” Enrico Antonj, chairman of the European Warehousekeepers Federation (EWF), told Reuters on the sidelines of the World Cocoa Conference in Amsterdam.
One warehouse keeper said it had been clarified that the 60-day rule would only apply from when the paper warrants for beans are lodged, meaning when proof of ownership is given and the invoices for rent and delivery-out rates are issued, which usually takes between three and four weeks.
Warehousing has been controversial in metals markets for years and more recently in coffee and cocoa, where supplies have been locked down for months in queues while warehouse owners collect the rent. (Reuters)