Pork prices through the roof in China - live pig financial futures may be launched
As pork prices soar in China, the Dalian Commodity Exchange is preparing the launch of live pig financial futures contracts. Such contracts may help the country’s pork farmers and traders to hedge their risks.
In China, the world’s largest live pig industry, pork prices have recently increased 46.7 per cent from a year earlier, while live pig prices doubled in September from a year earlier.
China currently does not have pig futures, but it may follow the example of the Chicago Mercantile Exchange that launched the world’s first live pig futures in 1966, which were later renamed as ‘lean hog futures’.
The South China Morning Post reports: “Futures contracts allow buyers and sellers to agree on the price of a commodity at a certain future delivery time. The contract allows the seller, such as a pig farmer, to lock in the price of his product, hedging against the risk of a drop in the price.”
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