U.K. POTATO FUTURES TRADING NOT TO BE SUSPENDED
Trading on the London potato futures
market will not be suspended, Richard Harris, Chairman of the
London Potato Futures Association (LPFA), said in a statement
to floor members.
    It was in response to strong representations by the Potato
Marketing Board (PMB) complaining of a gross distortion of
price which they say will result in large deliveries into the
physical market when the April futures position expires.
    The PMB had sought an immediate suspension in futures
trading and asked the LPFA to take action to restore the
relationship between futures and physicals.
    Farmers and merchants have alleged a squeeze and cornering
of the market but Harris pointed out that recent investigations
by the Association of Futures Brokers and Dealers (AFBD), the
International Commodities Clearing House (ICCH) and other
parties, found no evidence to substantiate this.
    The main complaint from some sections of the physical
market is what they say is an unrealistic futures premium over
the PMB's average ex-farm price. April futures traded this
morning between 168 and 170 stg per tonne compared with PMB's
average price of 104 stg.
    Bill Englebright, joint secretary of the LPFA said there is
a two-tier market for physical potatoes. He said quality
potatoes are in short supply and prepackers have been paying
between 145 and 165 stg per tonne for best samples. But lesser
quality grades have traded below 100 stg.
    Some merchants fear that a large tonnage will be delivered
against the April futures contract between now and the end of
the month, and possibly disrupt the physical market.
    Harris said the LPFA rule book allows the management
committee to take steps as necessary to correct any malpractice
and he assured the committee is monitoring the situation.
 Reuter
