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Liffe saw no abuse on July cocoa -Liffe letter

LONDON, July 20 (Reuters) - The London NYSE Liffe NYX.N exchange saw no evidence of abusive trading behaviour on the July cocoa contract that expired last week with the physical delivery of almost all London's cocoa stocks, Liffe said in a letter to a group complaining about alleged excessive speculation in London cocoa futures.

“From our investigations there is no evidence of abusive behaviour or that any market participant is trading with the specific purpose of distorting the price of the July 2010 delivery month,” said the Liffe letter, dated July 8.

Liffe declined to comment when asked by Reuters about its letter.

Reuters reported on July 2 that 16 European cocoa industry participants had complained to Liffe saying the extent of speculation in London cocoa futures <0#LCC:> could drive them towards using the U.S.-based Intercontinental Exchange ICE.N and urging more transparency in London cocoa futures. [ID:nSGE66404T] [ID:nLDE6641C8]

In the July 8 letter to the group, obtained by Reuters, Liffe said it is in “engagement with open position holders about their intentions, to ensure that business is conducted in an orderly manner.”

The letter referred to efforts Liffe was making on regulation and said on the question of trading position limits: “Whilst there was some support from market participants for the introduction of position limits, there were also many views expressed against the introduction of such a policy.” (Reporting by European softs team; Editing by Anthony Barker)

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