* Exchange will be first to cover whole rapeseed complex
* Sees hedging needs for biodiesel, livestock feed makers
* Traders sceptical after past rapeseed oil futures failed
By Gus Trompiz
PARIS, Jan 22 Euronext will this year
launch futures and options for rapeseed meal and oil to offer a
full suite of rapeseed derivatives to a growing market spanning
food, livestock and biofuel sectors, the European exchange said
Euronext already offers rapeseed futures that have
become its second-largest agricultural derivatives market in
Paris, after milling wheat. It would be the first exchange to
cover all the main products in the rapeseed complex.
This marks Euronext's second attempt to develop rapeseed oil
futures, after weak demand put an end to the market only a year
following a first launch in 2007. The exchange said demand
across the rapeseed complex was much stronger now.
"World production of rapeseed has grown by over 80 percent
in the last 10 years; there has been significant growth in the
use of rapemeal in animal food and an increase in the use of
edible oil," Lee Hodgkinson, head of Euronext's Markets and
Global Sales, was quoted as saying in a statement.
Rapeseed meal and oil are produced when rapeseed is crushed.
The exchange expects to launch trading in the second half of
the year after finalising the specifications of the contracts,
Lionel Porte, senior manager commodity derivatives product
development at Euronext, told Reuters by telephone.
European traders were sceptical about short-term prospects
given the failure of the previous rapeseed oil contract and the
difficulty of getting new agricultural futures off the ground.
"The problem with these markets is liquidity. You do not get
liquidity without the big boys and the big boys are not
interested unless there is liquidity," a cash broker said.
Despite its strong growth, the existing rapeseed futures
remained a relatively shallow market compared to wheat and
driven by a small number of big operators, traders noted.
"It could provide some visibility on rapeseed margins," a
futures broker said. "But for now we haven't had any customers
saying they were interested in having meal or oil contracts."
Euronext had responded to interest from animal feed makers
and to the maturing of the mostly rapeseed-based European
biodiesel sector since the demise of the earlier rapeseed oil
contract, Porte said.
It also hopes to attract rapeseed operators from outside
Europe who often hedge against soybean derivatives in Chicago,
he said, citing rapeseed exporters in Canada and Australia.
Contract specifications such as delivery points would aim to
reflect the physical markets, Porte added, noting Paris rapeseed
futures were initially quoted in German marks in the 1990s in
view of the importance of Germany's oilseed sector.
The existing rapeseed futures have seen growth of 67 percent
in traded volumes over the past five years and in 2013 an
equivalent of 93 million tonnes of rapeseed was traded, Euronext
said, representing more than four times annual rapeseed
production in the European Union.
Euronext's Paris-based agricultural futures are part of
continental European activities that ICE plans to spin off in a
share listing after its takeover of NYSE Euronext last year.