But the exchange decided to postpone the listing which was due to take place on January 2, 2013, until further notice because the adjustments may affect the value of the cotton, he said. "These changes under consideration may be determined to affect the value of the futures contract, and the delay in listing the December 2015 is intended to preserve the ability to implement the changes against the December 2015 contract in such cases," he said.
A new listing date will be announced when the Atlanta-based exchange has decided whether to go ahead with the tweaks, he said. The postponement is unlikely to disrupt trading as liquidity in far forward contracts is very low. Out of the three contracts already trading in 2015, July has one lot of open interest, but there are no outstanding positions in March or May.
Cotton No 2 is one of ICE's smallest products measured by open interest and trading volumes, but the contract provides the pricing benchmark for most of the world's global cotton trade. Furthermore, any review of the century-old contract will draw particularly intense scrutiny from the industry amid signs that the exchange's stronghold in this niche market is facing increasing competition.
In a bid to supplant the ICE contract, some of the world's major merchants are trying to persuade its rival, CME Group , to launch the world's first global cotton contract. Only US-grown cotton, which accounts for only one-fifth of this world's estimated 116 million 480-lb bale output in 2012/13, is accepted for delivery on ICE. Some merchants say the US-only contract is vulnerable to price-distorting squeezes.
In turn, ICE is considering adding international delivery locations, although those deliberations are still at an early stage, sources have said. March 2013, ICE's most active cotton contract, has open interest of just under 122,000 lots, representing 6.1 billion lbs of cotton worth $4.7 billion.