UNITED STATES 21st October 2010

The coffee committee that advises New York's Intercontinental Exchange (ICE) coffee futures terminal market in mid-October advocated allowing delivery of Brazilian arabica beans against the benchmark "C" coffee contract.

While ICE itself made no comment, reports said that the proposal would now go to the exchange's board, which would make a final decision on whether the rules for the coffee contract should be amended to allow Brazilian coffee to be tendered.

Brazil has lobbied for years for the New York exchange to allow the move, which it says would improve liquidity and aid hedging for traders on the "C" contract.

Spokespeople for other origins, whose coffees are included in the "basket" of coffees that can be tendered against the "C" contract, were quoted as being unhappy that the move is being considered. They feel that including Brazilian beans could depress the New York market and make the "C" contract less representative of real market prices.

It was understood that even if the move is approved, the rule change would not go into effect until at least 2013.