JOURNAL: Can you give us a basic description of the WTB?

HCK: The WTB Commodity Exchange Hannover started trading in futures with contracts on table potatoes in April 1998. We are Germany's first fully computerised commodity exchange. Our members are linked with the exchange via an electronic network, which enables them to participate in the trading of our products within seconds, independent of their location.

JOURNAL: Tell us about London Potato Futures.

HCK: WTB introduced the new cash settled futures contract on London Potatoes on January 17 2003. The British Potato Council (BPC) is providing the basis for the cash settlement price.

JOURNAL: What are the key points in the contract specifications on London Potatoes?

HCK: The unit of trading is 25 tonnes (25,000kg), The quotation is in euros per 100kg, the minimum tick size is e0.1 (tick value = e25). The delivery months are November, April and May.

JOURNAL: What is the cash settlement price:

HCK: Cash settlement is done through the WTB-BPC index. The index is based on the BPC spot-average-price which reflects the open market price for processing, packing and other potatoes ex farm ñ excluding the cost of bags. The index is calculated weekly on the average of the value of potatoes traded divided by the tonnage.

JOURNAL: How is the conversion into euros done?

HCK: The BPC spot-average-price is quoted in sterling and converted into euros by the WTB using the weekly average of the GBP/euro reference rate published by the European Central Bank.

JOURNAL: What is your strategic goal?

HCK: London potato futures completes the potato group which we started five years ago with our potato futures table. We broadened our range of products last year by introducing a future on continental processing potatoes. It is our aim to become the leading trading platform for potato futures in Europe.

JOURNAL: What makes WTB unique?

HCK: WTB is the only exchange where you can trade spreads on futures in three different European potato products. Additionally we offer extremely competitive transaction fees especially in our processing potato future. It underlines our aim to become the leading trading platform for potato futures in Europe. Additional Information can be found on our website www.wtb-hannover.de

BDF COMMODITIES: THE UK PARTNER OF WTB

HCK: The market is now becoming an important part of the UK potato industry ñ offering excellent hedge facilities for farmers and buyers alike.

BDF has opened many new accounts from a cross section of the industry on a professional basis, rather than speculative accounts and tenderers which were the mainstay of the old contract.

The reason is that confidence in the market is growing, as it is now based on the BPC spot-average-price instead of physical delivery. An amount of common sense now prevails unlike the old contract which historically was the most volatile futures market in the world.

Obviously this is a new market and will take time to expand, but we are confident the business will develop. Clients know exactly what they are trading and can use the market as a pricing mechanism to manage risk. Even some of the sceptics are trading.

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