Liffe proposes delivery limits on London agriculturals

LONDON Feb 16 (Reuters) - NYSE Liffe issued the second phase of its consultation on Thursday to increase regulation of its cocoa, robusta coffee, white sugar and feed wheat contracts, including proposed delivery limits.

The exchange said that after receiving feedback from participants in its London commodity contracts between November 2011 and January 2012, it proposed increased reporting requirements for large positions and position limits on delivery months, with an allowance for delivery limit exemptions.

The delivery limits capped robusta coffee deliveries at 75,000 tonnes from November 2012, cocoa deliveries at 75,000 tonnes as of December 2012, white sugar at 250,000 tonnes from December 2012 and feed wheat at 200,000 tonnes from January 2013.

The limits were partly influenced by a review of historical deliveries made against the commodity contracts over the past 10 years, the exchange said.

Delivery limit exemptions of up to double the delivery limit may be possible under certain circumstances including where there is an intention for the commodity to be used to fulfill a commitment to a physical user, the exchange said.

Proposals also included a requirement for exchange members holding large open positions to initiate discussions with the exchange on the rationale for the position.

The closing date for responses to the second phase of the consultation is March. 9.

European commodity markets are under pressure to tighten regulation as the United States pushes forward with plans to curb speculative activity, blamed by some for boosting food and energy prices to record highs in 2008.

The exchange introduced a Commitments of Traders (COT) report in October detailing positions held in London's cocoa, robusta coffee, white sugar and feed wheat markets to increase transparency.

Draft European Union rules give the European Securities and Markets Authority (ESMA) powers to manage or even set position limits for commodity derivatives.