Dalian Commodity Exchange plans live pigs futures

The Dalian Commodity Exchange (DCE) is expecting a prominent prospect of soon launching of live pigs futures. The exchange had worked out a standardised contract for pig futures that awaited the green light from Chinese regulators. The exchange has been mulling launch of the futures since 2006. However, it is difficult to establish standards for breeding, delivery and quarantine of pigs. The regulators are cautious about the matter and thus the futures have not debuted by far.

The Chinese futures industry has noticed that it was for the first time that a document of the CPC Central Committee and State Council of China referred to the expression of stabilising the development of the pig industry through futures transactions. "The CPC Central Committee and State Council recently issued several opinions on promoting agriculture in 2009 continuously by increasing peasants' income and stable development, which referred to 'adopting such measures as market early warning, reserve adjustment, additional insurances, and futures transactions to stabilise the development of the pig industry'," as stated in the circular issued by the exchange on its web site. The introduction of live pig futures will help stabilise pork production.

Currently, the exchange's listed futures products are non-genetically modified soybean, or soybean No.1, genetically modified soybean, or soybean No.2, soybean meal, soybean oil, corn, LLDPE, RBD palm oil and malting barley.

"In 2009, the DCE will continue to push forward trading goods and regulation innovations on the safety and soundness basis by focusing on providing services to the market, the industry and play the role of a market," Liu Xingqiang, president and CEO, DCE, said.

In 2008, exchange witnessed an annual transaction of 638 million contracts with a turnover of 27.49 trillion yuan, an increase of 71.95% and 130.49% year-on-year respectively, which accounted for 46.80% and 38.22% of the national market.