Dalian Exchange Ready For Futures

CHINA - The Dalian Commodity Exchange, one of China's biggest agricultural traders, said accelerating the start of hog-futures trading could help boost efforts to increase pork production and stabilize prices.
calendar icon 17 March 2008
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Rising production costs and concerns about oversupply have stymied farmers' interest in raising pigs, so futures would be a tool to help them minimize risks, Liu Xingqiang, general manager of the exchange, said in an e-mailed statement yesterday.

China has given incentives to farmers to address a slump in pork output that caused prices of the meat to almost double in the past year. As pig-raising had been mostly unprofitable in the past three years, farmers' worries about unforeseen price falls make them reluctant to breed the animals, Liu said.

High pork prices are "fundamentally a market problem," and can only be solved in the long term through the market, Liu said. "The launch of hog futures should be sped up," to help gauge prices for the next year, Bloomberg News said.

The Dalian exchange has conducted mock hog deliveries against contracts in Wuhan and Guangzhou, and is ready to start trading the hog futures contract, Liu said.

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