Monday, April 20, 2009

Rice Futures

China initiated trading of Rice futures today on the Zhengzhou Commodity Exchange.

Rice futures rose after markets opened in China on expectations government policies to boost planting interest and food security may bolster prices, according to Bloomberg.

Yang Jing, an analyst at Dahua Futures Co. told Bloomberg in this article“It is the first day of trading, so some investors may decide to give the new product a shot, I see the contracts mainly being used by processors for hedging.”

Either way. Rice Futures = Very Cool

Although it will probably be some time until China's Rice Futures are like the agricultural futures which trade over in Chicago, which more closely reflect the true price of the commodity in the world market, it is no less a step in the right direction for China's ever going process of modernizing and evolving their financial system.

---> Zhengzhou Commodity Exchange (ZCE)

The first experimental futures market approved by the State Council, was established on October 12, 1990. It introduced futures trading on May 28, 1993, two years after the successful operation of cash forward contract trading. In August 1998, the ZCE was confirmed by the State Council as one of the three futures exchanges in China.