Europe coffee, cocoa warehouses seek to temper new exchange rules
* Industry association sends letter to NYSE Liffe after legal advice
* Two warehousekeepers say main complaint is rent limit
By Sarah McFarlane
LONDON, April 29 (Reuters) - European coffee and cocoa warehouse companies want NYSE Liffe to temper strict new warehousing rules designed to prevent logjams, the industry association said on Tuesday.
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.
In January NYSE Liffe announced changes to its cocoa and coffee grading and storage rules, which including a limit on how long warehouses can charge rent when delivery or transfer of stock is delayed.
Some warehouse owners are unhappy with the rule changes and have sent a letter to NYSE Liffe after seeking legal advice.
"We sent a letter yesterday to the exchange with a list of proposed changes to the new rules they have implemented," Enrico Antonj, chairman of the European Warehousekeepers Federation (EWF), told Reuters.
The IntercontinentalExchange (ICE), which owns NYSE Liffe, declined to comment on whether it had received the letter or would be willing to consider the EWF's proposals.
The new rules force warehouses to stop charging rent for goods that have not been moved within 60 days after a request is made and require additional information to justify warehouse charges.
Two warehousekeepers familiar with the matter said that the 60-day limit was one of the main complaints warehouses had with the new rules. The warehousekeepers said that one of their proposals was a longer time limit before being forced to stop charging rent.
"There was something there and it had to be addressed but things have gotten overdone," said a coffee and cocoa warehousekeeper. "There must be some adjustments to the new rules."
The new rules follow ICE's acquisition of NYSE Liffe, including the London-based cocoa and robusta coffee contracts in November.
Warehouse storage rents and load-out rates have sparked controversy as coffee and cocoa markets started mimicking business models used in metals markets.
Manufacturers needing raw materials like aluminium have long complained they had to wait months and pay dearly to get metal from some warehouses overseen by the London Metals Exchange around the world.
Both the LME and the ICE exchanges are trying to tackle hoarding activities in metals and softs markets.
Last month the London Metal Exchange's (LME) plans to cut logjams in its global warehouse network with some similar rule changes were derailed by Russian aluminium producer Rusal winning a court decision to halt the reform because consultations had been "unfair and unlawful".
The LME said on Monday that it planned to seek permission to appeal against the court ruling. (Reporting by Sarah McFarlane; Editing by Veronica Brown and Susan Thomas)
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