"Opening a grading facility in Amsterdam puts this important function within close proximity of the key cocoa storage facilities, therefore improving the efficiency and cost effectiveness of the futures sampling and grading process," says Cees Vermaas, ceo of CME Europe. "Our partnership with SGS helps to further ensure the integrity of the process, resulting in fair values for our clients and a more effective hedging tool for the cocoa market."
Physically delivered, euro-denominated cocoa futures were launched on CME Europe in March this year. Since launch it has traded more than 6,000 contracts and has more than 1,000 contracts in open interest.
This was complemented in June 2015 by the introduction of cocoa options. Amsterdam was selected as one of three delivery ports for CME Group's new cocoa futures contracts.
"Delivering high quality services and fast turnaround times, our new grading facility puts SGS and CME Europe at the forefront of the European cocoa market," says Albert Wesenhagen, Agricultural Business Development and Branch Manager, SGS. "Our highly trained personnel will conduct intake supervision, as well as all testing and grading in accordance with CME Europe criteria and procedures and FCC rules."
Futures markets in cocoa are essential to help manage risks in the complex supply chain involved in chocolate and related manufacturing across Europe. For a futures contract to be an effective hedge for physical cocoa, the process of sampling and grading cocoa held in storage must be rigorous.
As the world's leading and most diverse derivatives marketplace, CME Group brings buyers and sellers together through its CME Globe electronic trading platform, its trading facilities in New York and Chicago, and through its London-based CME Europe derivatives exchange.
SGS is the world's leading inspection, verification, testing and certification company. With more than 80,000 employees, SGS operates a network of over 1,650 offices and laboratories around the world.