LONDON — Louis Dreyfus Co. (LDC) has offloaded the bulk of its certified robusta coffee stocks ahead of a rule change that will make it more expensive to carry the coffee forward, industry sources told Reuters.
Some 59,270 tons of robusta coffee has changed hands in the delivery period that began at the start of this month, Intercontinental Exchange data showed on Friday.
This is equivalent to about 76% of certified stocks currently held in European warehouses.
Industry sources said the bulk of this was tendered on behalf of LDC, signaling that the trade house is unwinding its majority hold on certified stocks.
LDC declined to comment.
Ownership of certified robusta stocks is often seen as a strategic move because it can give trade houses a bigger sway over the structure of the futures market.
Four industry sources said that the key driver behind LDC’s move was a looming change to exchange rules, which will add extra costs to robusta contracts from July, the next delivery period.
“Commercially, it didn’t make sense to hold it,” one source familiar with the matter told Reuters. “It didn’t get to the point where you were even close to breaking even.”
The rule change is the latest in a series of reforms to the robusta contract in recent years after complaints that the exchange was failing to stop abuses such as steep rent charges and long warehouse loading delays.
Under the new rules, sellers of certified robusta stocks will have to absorb a load-out cost of about $35 a ton, effectively making contracts from July onward “free on truck.”
Previously, the buyer had to cover these load-out charges if they wanted to transfer the coffee out of the warehouse.
“With the rule change, somebody is going to have to pay when they re-tender the coffee in July,” one of the sources said. “There’s going to be a cost associated with that.” — Reuters

BEIJING — China has ramped up inspections of pork shipped from the United States, importers and industry sources said, the latest American product to be hit by a potentially costly slowdown at Chinese ports in the past couple of weeks.
Some trade experts said they believe Beijing is sending a defiant warning to Washington in response to sweeping US trade demands made on China last week.
The stepped-up checks have even hit China’s WH Group Ltd., the world’s largest pork company and owner of Smithfield Foods in the United States, and come amid increasing scrutiny of other US farm goods, including fruit and logs.
Ports are opening and inspecting every cargo that arrives, said Luis Chein, a director at WH Group, China’s top importer of US pork.
That compares with inspections carried out only “randomly” in the past, he told Reuters, significantly lengthening the time product stays at the port. The Chinese imports account for only about 2% of WH Group sales.
China’s General Administration of Customs, which oversees food imports, did not respond to a fax seeking comment.
“The President has been clear that China needs to treat US agricultural products more fairly, and we are troubled by reports that China continues to impose unjustified restrictions on US products,” said a US Agriculture Department spokesman.
Increased checks on US products are “not terribly surprising,” said Even Rogers Pay, an agriculture analyst at China Policy, a Beijing-based consultancy.
“In a situation where trade tensions are high, China will enforce every possible regulation on its books. It makes strategic sense to do so at this point,” she said.
Late on Monday, China’s customs agency announced it was stepping up quarantine checks on apples and logs from the United States after detecting pests in imports of the products at Chinese ports.
US President Donald Trump has threatened tariffs on up to $150 billion of Chinese goods, largely because of US allegations that Beijing misappropriates US technology through joint-venture requirements, unfair licensing practices, outright theft and state-backed acquisitions of US technology firms.
Beijing denies those accusations.
China’s top economic official, Liu He, will visit Washington next week to resume trade talks, the White House said on Monday, after a US delegation led by Treasury Secretary Steven Mnuchin came away from a visit to Beijing last week with no agreement over a long list of US trade demands.
US pork is now sitting at Chinese ports for up to two weeks, instead of a few days, industry sources told Reuters.
Most of the imported pork is frozen and not at risk of perishing. But the move comes on top of the additional 25% duties Beijing slapped on American pork and a slew of other goods last month, in retaliation for US tariffs on steel and aluminum imports.
The United States is one of China’s top overseas pork suppliers, shipping $489 million worth of the meat last year.
A person working at a Shanghai-based meat trading firm said customs officials were also taking samples from about 20% of US pork shipments since last month, up from about 5% previously.
He declined to be named because of the sensitive nature of the topic.
There had been no change for imports from other destinations the company buys from, including Canada and Europe, he added. Two German pork exporters said they were not aware of any changes to inspections.
Stepped up inspections and sampling were also cited in an April 30 report by the United States Department of Agriculture attaché in Beijing, which said the new measures had started on April 23 but gave no further details.
The tariffs have already cut off demand for muscle cuts, or higher value pork meat, and pressured the price of so-called “variety” meat, such as offal and feet, the biggest portion of US pork exports by volume.
In addition, China’s domestic hog prices have plunged in the first quarter, and are still hovering around eight-year lows of about 10 yuan ($1.57) per kg. That has led WH Group to sharply reduce its imports anyway this year, added Chein.
China’s total pork imports declined 10% to 595,611 tons in the first three months of the year, according to Chinese customs. — Reuters