Cocoa body extends consultation on stricter quality rules

* Consultation deadline extended to Sept. 4

* FCC to discuss implementation time line at Sept. 9 meeting

The London-based Federation of Cocoa Commerce (FCC) has extended its consultation period on changes proposed to physical cocoa contracts used globally after its tight time frame caused consternation amongst traders.

The proposed changes from the international organisation for the cocoa private sector include stricter controls on bean quality and are hoped to improve transparency.

Philip Sigley, chief executive of the FCC, said on Tuesday that the body had extended the consultation period to Sept. 4, from a previous deadline of Aug. 17.

The FCC has also revised its previous plan to implement any agreed changes on Sept. 1 and would now discuss any revisions to the proposed rules and an implementation date at a meeting on Sept. 9.

Sigley estimated that around 75 percent of global cocoa bean trade is done via FCC contracts.

Traders said that they needed more time to respond to the proposed changes, particularly a 3.5 percent limit on newly defined "cocoa-related matter", which includes broken beans, bean clusters, pieces of shell and germinated beans.

"The initial feedback is literally zero cocoa from all origins and grades landing normally in Europe or the U.S. is meeting that criteria, so you're opening the gates to a massive number of claims," a European trader said.

Cocoa that failed to meet the limit would be delivered at a discount.

The FCC declined to comment on what percentage of cocoa traded globally might not meet the proposed standards.

Three traders said that the limits for clusters, germinated beans and residues should each be set separately.

"To have them altogether at 3.5 percent is at the moment unrealistic given the quality that we're seeing currently out of Ivory Coast, Nigeria and Cameroon," a second trader said.

Traders also wanted a longer lead time before any changes were introduced.

"A lot of people booked already their forward sales contracts so to do it the proper way you should agree on it and apply it from one year's time," the second trader added.

Traders were broadly supportive of the FCC's goal to provide clearer definitions, with a focus on quality.

"I think it's a good attempt to raise the overall quality of cocoa," a third trader said.