* No change to quality spec, just certification process,
* ICE delays listing Dec 2015 contract until decision made
* Move comes as industry pushes for global contract
NEW YORK, Dec 26 IntercontinentalExchange Inc
has delayed listing its December 2015 cotton contract
for trading while it considers changing its process for
registering the fiber for delivery against the exchange, it said
in a notice on Wednesday.
The changes being considered will not affect the qualities
of cotton tenderable, but rather the certification procedures
for registering cotton as deliverable, Tim Barry, vice president
of ICE product development, said in the notice.
But the exchange decided to postpone the listing which was
due to take place on Jan. 2, 2013, until further notice because
the adjustments may affect the value of the cotton, he said.
"These changes under consideration may be determined to
affect the value of the futures contract, and the delay in
listing the December 2015 is intended to preserve the ability to
implement the changes against the December 2015 contract in such
cases," he said.
A new listing date will be announced when the Atlanta-based
exchange has decided whether to go ahead with the tweaks, he
The postponement is unlikely to disrupt trading as liquidity
in far forward contracts is very low. Out of the three contracts
already trading in 2015, July has one lot of open interest, but
there are no outstanding positions in March or May.
Cotton No. 2 is one of ICE's smallest products measured by
open interest and trading volumes, but the contract provides the
pricing benchmark for most of the world's global cotton trade.
Furthermore, any review of the century-old contract will
draw particularly intense scrutiny from the industry amid signs
that the exchange's stronghold in this niche market is facing
In a bid to supplant the ICE contract, some of the world's
major merchants are trying to persuade its rival, CME Group
, to launch the world's first global cotton contract.
Only U.S.-grown cotton, which accounts for only one-fifth of
this world's estimated 116 million 480-lb bale output in
2012/13, is accepted for delivery on ICE. Some merchants say the
U.S.-only contract is vulnerable to price-distorting squeezes.
In turn, ICE is considering adding international delivery
locations, although those deliberations are still at an early
stage, sources have said.
March 2013, ICE's most active cotton contract, has
open interest of just under 122,000 lots, representing 6.1
billion lbs of cotton worth $4.7 billion.
Spokespeople for ICE and Barry did not respond for requests
for comment on what the changes may entail.