China's Dalian Commodity Exchange (
) is working on launching hog futures, but will need more time
for preparations, the exchange president Liu Xingqiang told
reporters at an industry conference on Wednesday.
"The launch of live hog futures
will be an essential tool for farmers to manage price risk ... I
think it's only a matter of time," Liu said.
However, with food inflation running high in part due to a
sharp jump in pork prices this year, Liu said some authorities
were concerned about the impact of futures on inflation and
farmers' livelihoods, and were therefore extra-cautious.
"We obviously hope to launch the contract soon, but because of
the concerns, we will have to do more preparatory work," Liu
Plans by DCE to launch live hog futures have been in the works
since 2007, but industry observers said they have been delayed by
regulators' deep concerns about speculation either driving up
prices or pushing them sharply lower -- hurting either consumers
Pork prices -- which have risen more than 60 percent over the
past year due to a combination of falling supply, soaring corn
prices and higher wages -- made the largest contribution to
inflation in May, when China's consumer-price index rose to 5.5
percent, the highest in nearly three years.
China, a nation of 1.3 billion people, is the biggest consumer
and producer of pork.
Separately, Liu said the DCE was looking at plans to launch
agriculture and energy-focused futures contracts, adding that
exchanges need to increase their product offerings to serve the
hedging needs of Chinese businesses.
China's three commodity exchanges in Dalian, Zhengzhou and
Shanghai offer a combined 25 futures products, including a range
of base metals and agricultural products such as copper,
aluminium, sugar corn, and soy bean.
"Compared to other developed markets
that have hundreds of product offerings, we are still very far
behind and there's a lot of room to grow," Liu said.
The DCE has previously said that it was considering the launch
of japonica rice, a local rice variety in northeastern China. It
is also studying crude oil, electricity and petrochemical
The Dalian Commodity Exchange, located in northern China, is
the world's second-largest agricultural commodity exchange and
the largest in Asia Pacific. Its trading volume dipped 3 percent
in 2010 from a year ago to 403 million contracts.