The FT has reported (here) that a dealer has amassed a large position in the August Robusta coffee contract, which has caused the spread between the July and September contracts to significantly rise. It is alleged that this activity may be part of an “abusive squeeze”, a practice where a market participant buys up a large part of a near delivery month in order to “squeeze” short sellers.

This comes at a time when there is a great deal of debate about the position limits under MiFID II, which could well outlaw the accumulation of such a position. The rules are intended to prevent manipulation such as that which is alleged. The final Regulatory Technical Standards are due in September.