CME Group Inc (CME.O), the world's largest futures exchange operator, plans to launch a cocoa futures contract this year, challenging rival Intercontinental Exchange's (ICE.N) dominance in the market, industry sources said.

The exchange held a meeting in London on Wednesday with representatives from the cocoa industry including traders, brokers and chocolate makers to discuss its plans, sources who attended the meeting said on Thursday.

CME declined to comment.

The sources said that those attending the meeting were broadly supportive of the concept of the contract, although they wanted more clarity on the details.

The new cocoa contract would rival Liffe's London-based cocoa market, acquired by the Intercontinental Exchange (ICE) in November last year.

Traders and brokers on Liffe soft agricultural commodity markets have expressed concern that ICE's takeover of their contracts created a near monopoly, as the ICE and Liffe exchanges together account for the vast majority of global cocoa, coffee and sugar derivatives trading.

The two existing major global cocoa futures contracts, now both owned by ICE, are based in London and New York.

CME Group, through its Chicago Board of Trade subsidiary, is the dominant exchange for trading in global grains and oilseeds but is not prominent in cocoa, coffee and sugar.

Last year, however, CME hired a couple of soft commodity specialists who had in the past worked on contracts for NYSE Liffe.

At the time, the CME declined to comment on whether the hires related to any plans it might have to expand in soft commodity markets.

Exclusive: CME plans cocoa futures contract to rival ICE | Reuters

I can see it being taken up, but as with the dual oil markets across CME and ICE, people tend to prefer one over the other so volume will probably stick with one or the other. Then of course it will be interesting to see how the dynamics of the existing contract change as people try to arbitrage discrepancies inter market.