* CME cocoa plans stir currency debate
* Faces some resistance from UK-based participants
By Sarah McFarlane
LONDON, July 30 (Reuters) - The Intercontinental Exchange is considering changing the currency of its sterling-denominated Liffe cocoa futures to euros, market participants said.
Europe is the leading region for chocolate demand and many in the chocolate industry are in favour of a contract in euros.
ICE is consulting the market on whether it would support the move, but there is no time frame in place for a decision, the sources said.
The exchange declined to comment.
The currency of the Liffe contract has been discussed intermittently for years, but plans by rival exchange CME to launch a cocoa contract have given new impetus to the debate, sources said.
The CME has not announced the currency of its new product but sources said it had reconsidered its earlier plans to launch a sterling contract and was instead looking at using the euro.
The CME declined to comment.
"If all things were equal then this would be an ongoing debate ICE would have that no one would pay much attention to, but ICE is under tremendous competitive pressure now because of the CME," a London-based broker said.
"If they (CME) are going to release a euro contract then ICE cannot not release a euro contract because it's too much of a commercial risk."
ICE acquired the NYSE Liffe softs commodity contracts including cocoa in November 2013 and ahead of the acquisition, Ben Jackson, president and chief operating officer of ICE Futures U.S., said the exchange would look at the currency of the cocoa contract.
The London cocoa futures contract was launched in 1928, long before the euro currency came into use, and is one of the last commodities futures traded in sterling.
But the new currency has grown rapidly in importance.
"The whole business of cocoa in Europe is more euro denominated than sterling denominated," a second broker said.
In addition to this, the currency of the world's top grower Ivory Coast, is pegged to the euro.
"I am in favour of moving from a sterling contract to a euro contract because I think it's a better reflection of the currency domination of both the supply side and the demand side," a European trader said.
Chocolate makers buying cocoa products such as powder and butter mainly purchase in euros.
"It would make life a little bit easier and simpler to have a euro contract because it takes away several currency hedges which we need to do in order to run our positions," said a trader.
Some resistance remains, however, mostly from UK-based participants.
"There's a handful of trade houses that have a nostalgic view of sterling, they think there's nothing wrong with the contract, it works in sterling and the open interest is very healthy," said a London-based broker.
"The other concern is the transition, there is no elegant way to do it."
The transition away from sterling has already happened in other markets, including Liffe's robusta coffee contract, which changed to dollars in the 1990s.
"The main counter argument is that to do it is only going to cause disruption," said the broker.
"The transition is messy but having said that it will happen, it's inevitable and we should get on with it." (Editing by Keiron Henderson)