[Federal Register: February 3, 2000 (Volume 65, Number 23)]
[Notices]
[Page 5325-5326]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03fe00-56]
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COMMODITY FUTURES TRADING COMMISSION
Coffee, Sugar & Cocoa Exchange: Proposed Amendments to the coffee
``C'' Futures Contract Reducing the Discount Applicable to the Delivery
of Peruvian Coffee, Deleting San Francisco as a Delivery Port, Changing
the Requirements for Bags Containing Delivery Coffee, and Amending
Coffee Sampling Procedures
AGENCY: Commodity Futures Trading Commission.
ACTION: Notice of availability of proposed amendments to contract
terms and conditions.
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SUMMARY: The Coffee, Sugar & Cocoa Exchange (CSCE or Exchange) has
proposed amendments to the Exchange's coffee ``C'' futures contract.
The proposed amendments would: reduce the discount for Peruvian coffee
delivered in satisfaction of coffee ``C'' futures contracts from 400
points to 100 points (from 4 cents per pound to 1 cent per pound);
delete San Francisco, California as a delivery port; establish a
minimum standard weight of 700 grams per bag for bags used in packaging
deliverable coffee; permit new samples of coffee to be drawn for the
purpose of appealing initial grading decisions regarding the coffee
based on the first sample submitted; and change the method of
transmitting completed and signed sampling orders to the Exchange. The
proposed amendments were submitted under the Commission's 45-day Fast
Track procedure which provides that, absent any contrary action by the
Commission, the proposed amendments may be deemed approved on February
28, 2000--45 days after the Commission's receipt of the proposals. The
Acting Director of the Division of Economic Analysis (Division) of the
Commission, acting pursuant to the authority delegated by Commission
Regulation 140.96, has determined that publication is in the public
interest, will assist the Commission in considering the views of
interested persons, and is consistent with the purposes of the
Commodity Exchange Act.
DATES: Comments must be received on or before February 18, 2000.
ADDRESSES: Interested persons should submit their views and comments
to Jean A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 21st Street, NW Washington, DC 20581. In addition,
comments may be sent by facsimile transmission to facsimile number
(202) 418-5521, or by electronic mail to [email protected]. Reference
should be made to the proposed amendments to the Coffee, Sugar & Cocoa
Exchange coffee ``C'' futures contract.
FOR FURTHER INFORMATION CONTACT: Please contact John Bird of the
Division of Economic Analysis, Commodity Futures Trading Commission,
Three Layfayette Centre, 21st Street NW, Washington, DC 20581,
telephone (202) 418-5274. Facsimile number: (202) 418-5527. Electronic
mail: [email protected]
SUPPLEMENTARY INFORMATION: The coffee ``C'' futures contract currently
provides for the delivery of 19 growths of coffee, including coffee
produced in Peru, at CSCE-licensed warehouses in Miami, New York, New
Orleans, and San Francisco. Individual coffee growths are deliverable
at par or at specified premiums or discounts, with coffee of the growth
of Peru presently being deliverable at a discount of 400 points (4
cents per pound). The contract currently requires that the bags in
which deliverable coffee is packed must be made of sisal, henequen,
jute, burlap or
[[Page 5326]]
woven material having similar properties, with no requirements being
specified regarding the minimum weight of such bags.
The futures contract also requires that coffee intended for
delivery must be sampled and graded by CSCE-licensed individuals in
accordance with specified procedures and be certified as meeting the
contract's quality standards. Currently, samples of coffee intended for
certification must be taken by Exchange-licensed master samplers. The
contract requires that, after the samples have been taken, the master
sampler must return a signed and completed copy of the sampling order
to the Exchange, at the time the samples are delivered to the CSCE for
grading. In addition, if the samples of a coffee lot initially are
found to be not deliverable or to be of lower than expected quality,
the contract provides that the party seeking to have coffee certified
as deliverable may resubmit the coffee samples for re-grading.
The proposed amendments will reduce to 100 points (1 cent per
pound) the discount for delivery of coffee of the growth of Peru and
will delete San Francisco as a delivery point. The proposed amendments
also will establish a new requirement that deliverable coffee must be
packed in bags that have a minimum weight of 700 grams. In regard to
the contract's sampling procedures, the proposed amendments will
stipulate that the master sampler must put a copy of the signed and
completed sampling order into the bag containing the sample and deliver
the sample to the Exchange. In addition, the proposed amendments will
provide that, in the case where the owner of a given lot of coffee
appeals an initial grading decision, the owner of the coffee at its own
expense may elect to have a new sample of the coffee drawn and
evaluated for purposes of the appeal.
The CSCE intends to apply the proposed amendment reducing the
discount for delivery of Peruvian coffee to existing contract months
that have no open interest and to all newly listed contract months. The
proposed amendments deleting San Francisco as a delivery point and
modifying the contract's sampling procedures would be made effective
within 30 days of the date of the Commission's approval of the
amendments with respect to all existing and newly listed contract
months. The proposed amendment requiring that deliverable coffee be
packed in bags weighing at least 700 grams would be made applicable to
coffee certified for delivery on and after March 1, 2000.
With regard to the proposal to reduce the discount currently
applicable to Peruvian coffee, the Exchange said that ``[T]he physical
market currently values Peruvian coffee at par with the Coffee ``C''
contract or at a premium. * * * [H]ence the Peruvian discount * * *
needed to be narrowed from its current 400 points to 100 points to
reflect commercial reality.'' Concerning the proposal to delist San
Francisco as a delivery port, the Exchange said that ``[O]ver the past
few years, there has been almost no interest on the part of the coffee
trade to make or take delivery out of the Port of San Francisco. For
some time, the Exchange has had no licensed warehouses in the Port.''
In support of the proposed minimum 700-gram weight for bags used to
package delivery coffee, the CSCE said that it has been made aware that
Exchange coffee has been packaged in bags that easily disintegrate or
breakdown and that the proposed standard would strengthen the integrity
of the bags used. Regarding the proposal to permit new samples to be
drawn on appeal of a coffee grading decision, the Exchange indicated
that the existing rules permit appeals to be evaluated based on the
original sample but do not provide for the submission of new samples of
the same coffee, which may be particularly useful when the coffee has
failed the contract's taste standard (sweet in the cup) or due to the
presence of a few defective beans. Finally, concerning the change in
sampling procedure, the Exchange said that requiring that master
samplers label sample bags with a sequence number and insert the
completed and signed sampling order in the sample bag would help to ``
* * * avoid the appearance of a conflict of interest.''
The Commission is requesting comments on the proposed amendments.
In particular, comments are requested regarding extent to which
proposed 100-point discount for delivery of Peruvian coffee reflects
cash market pricing relationships between the value of washed Peruvian
coffee versus washed coffee of the par coffee growths (i.e., coffee
from Mexico, Salvador, Guatemala, Costa Rica, Nicaragua, Kenya, New
Guinea, Tanzania, Uganda, and Panama). Comments also are requested
regarding ordinary cash market requirements relative to the standards
that bags used to package coffee must meet and the effect on the
futures contract's delivery process of requiring a minimum weight per
bag of 700 grams. In addition, comments are requested concerning the
effect on deliverable supplies of the proposal to delete San Francisco
as a delivery point and the effects, if any, on the delivery process of
the proposed amendments to the contract's sampling procedures.
Copies of the proposed amendments will be available for inspection
at the Office of the Secretariat, Commodity Futures Trading Commission,
Three Lafayette Centre, 21st Street NW, Washington, DC 20581. Copies of
the proposed amendments can be obtained through the Office of the
Secretariat by mail at the above address, by phone at (202) 418-5100,
or via the Internet at [email protected].
Other materials submitted by the Exchange in support of the
proposal may be available upon request pursuant to the Freedom of
Information Act (5 U.S.C. 552) and the Commission's regulations
thereunder (17 CFR Part 145 (1987)), except to the extent they are
entitled to confidential treatment as set forth in 17 CFR 145.5 and
145.9. Requests for copies of such materials should be made to the FOI,
Privacy and Sunshine Act Compliance Staff of the Office of Secretariat
at the Commission's headquarters in accordance with 17 CFR 145.7 and
145.8.
Any person interested in submitting written data, views, or
arguments on the proposed amendments, or with respect to other
materials submitted by the Exchange, should send such comments to Jean
A. Webb, Secretary, Commodity Futures Trading Commission, Three
Lafayette Centre, 21st Street NW, Washington, DC 20581 by the specified
date.
Issued in Washington, DC, on January 27, 2000.
Richard Shilts,
Acting Director.
[FR Doc. 00-2332 Filed 2-02-00; 8:45 am]
BILLING CODE 6351-01-M
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