Prepare for another staple pricing readjustment courtesy of central clearing "risk management": minutes ago the ICE hiked its Clearing Member outright margin for Sugar (SB and SBC) from $2,150 to $3,550, a substantial 65% increase in margin requirements. Little by little more exchanges refuse to take on liquidity risk. In essence what the CME, the ICE, LCH and everyone else is doing by hiking margins (in addition to forcing a brief period of selling) is to offset liquidity risk, although not risk of more rounds of liquidity, but of the Fed's withdrawal of liquidity. If tomorrow Bernanke were to announce QE is over, all those who have so far enjoyed massive unbooked profits in their options accounts on margin, will see their NAV collapse and margin calls will provide the double whammy to a complete asset liquidation wipeout. Yet unlike in the case of silver, where the margin requirement was modest, here the jump is very material. That said, now that silver margins have been tightened, gold should follow shortly - surely, that is the prudent thing to do. On the other hand, ongoing delays in gold margin increase will make the whole recent margin readjustment somewhat odd - after all, what better way to keep another buying surge in check then not announcing how much gold margins will go up by. Once the news is out there, buyers will be able to process and adjust accordingly. As long as this information is merely anticipated, it will continue to be a far bigger brake to a parabolic move higher in gold than if it had been already disclosed and processed.