Shanghai Securities News China Securities Network (Reporter Song Weiping) my country’s first livestock futures varieties and live delivery varieties-live pig futures have been in operation for a full year since they were listed on the Dalian Commodity Exchange on January 8, 2021. The reporter learned from DCE on January 9, 2022 that the hog futures have been operating steadily over the past year, which has attracted great attention from all parties in the market, and industrial customers have actively participated. Especially in the downward cycle of hog prices in 2021, hog futures will be parallel to the spot market, effectively helping the industry to resist the risk of price fluctuations and ensuring the profits of breeding. It is promoting the stable and orderly development of my country’s hog industry and the stable and orderly development of the hog industry. The mechanism and other aspects have played an active role.
Provide good price guidelines and actively participate in the industry
The listing of live pig futures marks another solid step forward in the in-depth development of my country’s futures market. According to statistics, as of January 7, 2022, the cumulative trading volume of live pig futures was 6,166,900, with a turnover of 1.74 trillion yuan, and an average daily position of 60,800. The two contracts of LH2019 and LH2111 were delivered in a total of 54 contracts, and the entire business process was successfully completed. Closed loop, relevant rules, systems and process design have been fully tested by the market.
The listing of live hog futures coincides with the downward cycle of my country’s live hog spot market. During this period, the overall operation of live pig futures was stable, transactions and positions increased steadily, basically forming a pattern of “industry gradually participating, price discovery and hedging functions gradually playing out”, which played an important role in helping the industry avoid the risk of this round of price decline effect.
Specifically, the transaction and holdings of live pig futures show a continuous growth state, and price fluctuations are more rational than spot prices, which can reflect the market’s expected changes in future prices. When the spot price rises in January, the futures price presents a discount, and when the spot price When the trough fell in June and July, the futures price showed a premium, which provided good price guidance for the production and consumption companies in the hog industry, and also eased the excessive fluctuation of spot prices to a certain extent.
The data shows that at present, there are more than 2,600 corporate clients (excluding asset management and special law clients) participating in futures trading and delivery. More than 90 aquaculture companies have applied for hedging qualifications. Large-scale aquaculture companies are basically using the futures market. Formation, small and medium-sized farmers mainly participate in the “insurance + futures” project.
Hog futures have huge room for growth in the future
With the two major functions of “price discovery” and “risk avoidance” played by the hog futures, it is gradually benefiting the main players in the industry chain. Pig breeding companies and farmers have given positive comments and high affirmations to the hog futures, and also expressed their opinions on the hog futures. Expectations for the future development of futures.
Jiang Guojin, chairman of COFCO Jiakang Foods Co., Ltd., told reporters that COFCO has always paid great attention to the launch and operation of live pig futures. Avoiding business risks is the direct beneficiary of participating in live pig futures.
Qin Jun, secretary of the board of directors of Muyuan Co., Ltd., also said that as an important agricultural product related to the national economy and people’s livelihood, live pig futures provide a good tool and provide a new channel for risk management for the entire industry, including producers and traders.
“Live pig futures help promote the transformation of pricing in the entire industry. Companies can lock in the slaughter price in advance through futures hedging, warehouse receipt sales, or the trading of non-standard products extended from the on-site products.” Qin Jun said In the future, Muyuan will continue to deepen its understanding of futures varieties and the entire market, gradually increase participation, and contribute to the healthy development of the entire pig industry.
The reporter learned that, like COFCO Jiakang and Muyuan, there are not a few large listed companies that are actively using live hog futures. For many small and medium-sized farmers, the “insurance + futures” model of live pigs has also entered their daily operations and management.
For example, Huaxi Futures and Ping An Property & Casualty Insurance used live pig futures to launch a live pig “insurance + futures” project in Butuo County, Liangshan Prefecture, Sichuan, providing protection for 36 local pig farmers and 2,880 pigs, with a compensation rate of approximately 1.155 million yuan. About 334%.
In Jiang Guojin’s view, this is a solid start for the hog futures. I believe that as more and more companies participate in hedging, the overall scale and function of the hog futures market will have a lot of room for growth.
Market participants believe that there is a gradual process for any new breed to mature and function. Live pig futures have achieved gratifying results in the past year, but they still need a long time of deep cultivation and careful cultivation, and the support and understanding of all parties in the society are needed. It is hoped that all sectors of the society will actively cooperate to take good care of this new tool and promote its healthy development and growth.Return to Sohu to see more
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