March 2012 C&CI • European Import Facilities • 27


Liffe set to introduce minimum movement-out requirement


s highlighted in the January 2012 issue of C&CI, December 2011 saw a well-known warehouse in Antwerp given six days to deliver coffee to a Belgian trader, Sucre Export. Antwerp’s trade court ordered Wilmarsdonk warehouse to deliver 20,000 bags of coffee it was storing to Sucre Export in six working days, or incur a penalty of 1 Euro per day per bag. The cof- fee was taken up by Sucre against NYSE Liffe’s November Robusta coffee contract. Sucre Export took legal action after being informed early in November that the coffee could not be moved out of the Wilmarsdonk warehouse until January 15th, well after its commitments to deliver the coffee to customers.


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Concerns had been expressed about some warehouses’ seeming inability to deliver coffee in a timely fashion, and about Liffe’s unwillingness to tackle the issue. After representations were made to it by traders, the UK’s Financial Services Authority (FSA) is said to have discussed the issue with representatives of Liffe. Liffe reportedly wrote to the European Warehousekeepers Federation (EWF) requesting that the federation resolve deliv- ery delays on certified Robusta coffee "or it would introduce a minimum movement-out requirement." A letter from Liffe to the EWF said: "The current situation where owners are not able to move stock in a timely fash- ion is arguably having a detrimental effect on the integrity of the delivery process and is therefore something that needs to be addressed as a matter of urgency."


Major breakthrough


Speaking to C&CI in February, Stephan Loots, a consultant at Antwerp-based Sucre Export, described the court ruling as a "major breakthrough." Mr Loots said the Wilmarsdonk ware- house had delivered the coffee as required by the ruling, and that the court’s decision had raised awareness of what he said was a longstanding issue in the coffee industry in Europe. "We understand that Liffe plans to intro-


Euronext Liffe is set to introduce minimum movement-out requirements for certified coffee warehouses following a court ruling late last year


The Port of Antwerp is said to be concerned about damage to its reputation caused by problems at warehouses there


duce some changes shortly to improve the situation," Mr Loots told C&CI. "They are introducing changes to their Grading & Warehousekeepers Procedures (GWPs), probably from April onwards. The idea is that a warehouse will have to sign up to this as a condition of renewing its licence." "The idea is to introduce a minimum daily requirement for load-out that ware- houses have to comply with. The exact details are unclear but it looks as if they will require warehouses to load out a mini- mum percentage of the stock they hold. The exact amount they are required to be able to move will depend on how much they store. The minimum will be 200 tonnes per day. I understand that this might rise by 100 tonnes per day for every 10,000 tonnes of coffee stored by a ware- house."


Mr Loots said Sucre Export and other traders who have been affected by ware- houses’ reluctance to load coffee quickly enough welcomed the move, although he


said that moving 200 tonnes per day as a minimum was "fairly easy."


Warehouses can


move more if required "You only need to look back to recent times when there was a big squeeze – April/May 2011 is a good example – to see that when they really need to the warehouses can move a lot more than that. During the 2011 squeeze, warehouses were moving in excess of 1,500 tonnes per day," he told C&CI.


"Liffe has been under a lot of pressure from traders in recent months," said Mr Loots. "We welcome the move. Some traders and warehouses are not so keen, such as those who had an arrangement with certain warehouses and for whom it was part of their business model, but for the most part it is welcomed. We believe that the fact that the FSA began to look


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