By centering on serving the real economy and the requirements of the No. 1 Central Document, the futures market has kept exploring new methods of agricultural risk management and made helpful attempts like over-the-counter options and “insurance + futures” in servicing agriculture, rural areas, and rural residents and helping farmers to avoid risks in recent years. As a leading agricultural industrialization enterprise in Jilin Province, Jilin Yuntianhua has always targeted to realize integrated operation through the closed loop mode. In 2017, it made a great breakthrough in the integration construction through the “contract farming + insurance + futures” mode: a great closed loop has been formed in the agricultural production end as farmers has adopted “insurance + futures” and enterprises over-the-counter options.
Zhang Sheng, General Manager of Jilin Yuntianhua, expected the early listing of corn floor options. He said that under the current mode, the risk management subsidiary of a futures company can only engage in risk hedging by duplicating options from futures, which is of high cost and risk and leads to high insurance fee and options fee. As a result, the scale and scope of pilot programs are highly restricted. If corn options is listed, it can offer pricing reference for over-the-counter options and provide the market with a low-cost and efficient hedging instrument, thus reducing the hedging cost of over-the-counter options and helping to facilitate the sound and sustainable development of the “insurance + futures/options” pilot programs and the over-the-counter options market.
DISCLAIMER: The content of this English website is mainly translated by a third-party company. DCE has neither approved nor endorsed this English language version as an equivalent of the simplified Chinese character version. DCE and/or its subsidiaries accept no liability for any loss or damage, and make no warranty, guarantee, undertaking or representation in relation to the accuracy, reliability, availability or completeness of the content of this English website.