By Neena Rai 

CME Group said Tuesday it plans to launch a euro-denominated cocoa futures contract on its European exchange, CME Europe.

The launch of the cocoa futures contract on CME Europe -- set to take place on March 30 -- would represent the first exchange to have a euro-denominated contract for physical delivery.

"The introduction of the euro-denominated deliverable contract is in response to demand from various market players in the cocoa industry," Jeffry Kuijpers, executive director of agricultural commodities at CME Group said.

"As the contract is euro-based, it can help to alleviate currency risks for many cocoa processors who are actually based in Europe," said Mr. Kuijpers.

Meanwhile, CME Europe will also launch a U.S. dollar-denominated contract on a cash-settlement basis.

The contract will provide "customers with a cost-effective and efficient way to arbitrage between the London and New York cocoa futures markets.

Customers will also be able to take advantage of the margin efficiencies available from having both contracts cleared by CME Clearing Europe," the company said.

Write to Neena Rai at neena.rai@wsj.com

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