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DCE Releases Polished Round-Grained Rice Futures Contract and Relevant Rules

Date:15 August 2019
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Dalian Commodity Exchange (DCE) releases the Polished Round-grained Rice Futures Contract and relevant rules on August 13, marking one step closer to the listing of the polished round-grained rice futures.

According to the notice, the Polished Round-grained Rice Futures Contract of Dalian Commodity Exchange, the Detailed Business Rules of Polished Round-grained Rice Futures of Dalian Commodity Exchange, and the amendments to 4 rules are released and enter into force on the date of promulgation.

DCE solicited public opinions on the polished round-grained rice futures contract and relevant rules in July 2019 and made relevant revisions according to the collected opinions upon study. The Polished Round-grained Rice Futures Contract and relevant rules released this time present the following three changes compared with the previous drafts for public opinions.

First, as some information providers reported that their systems do not support the 3-digit contract code, the contract code of the polished round-grained rice has been changed from MSR (Medium-Short Rice) to RR (Polished Round-grained Rice) to make sure its compatibility in all market systems.

Second, some members and industry enterprises suggested raising the quality standards and other requirements, so as to guarantee the quality of polished round-grained rice for delivery. Thus, DCE has adjusted the required acid value for polished round-grained rice futures from no more than 22mg/100g to no more than 18mg/100g. The warehouse receipts canceling date within 3 trading days after the last delivery day has been adjusted to before the last delivery day (included).

Third, as the polished round-grained rice is an important edible rice product concerning the national economy and the people’s livelihood, DCE has made strict requirements for the position limit in the delivery month and the month before the delivery month, in a bid to ensure the steady operation after its listing. In particular, the position limit in the delivery month has been adjusted from 2,000 contracts to 1,000 contracts, and that in the month before the delivery month from 4,000 contracts to 2,000 contracts.

A market participant says that the amended polished round-grained rice futures contract and relevant rules have accurately reflected market opinions and demands and secure the stability and functioning of the market regarding the rules. It’s worth noting that lowering the acid value will ensure the freshness of polished round-grained rice, and adjusting the warehouse receipt canceling date will guarantee the registration canceling in the delivery month, which will bring convenience for the buyers to pick up the goods, ensure the goods quality, and will not conflict with the frozen warehouse receipts of rolling delivery in the next month.

According to the released contract and relevant rules for the polished round-grained rice futures, the trading unit is 10 tonnes / contract, the quoting unit is RMB / tonne; the contract months are from January to December; the last trading day is the 10th trading day of the contract month; the last delivery day is the 3rd trading day after the last trading day. DCE has formulated the delivery quality standards for polished round-grained rice futures that conform to the reality of the spots goods by relying on the latest national standards and giving full consideration to the quality of mainstream spot rice, which will satisfy the delivery and pick-up demands of downstream clients. The polished round-grained rice futures adopts physical delivery that involves both factories and warehouses deliveries and three delivery methods: EFP delivery, rolling delivery and one-off delivery. This will greatly expand the affordable delivery amount of polished round-grained rice and avoid delivery risks.

Besides, to ensure the smooth market operation, DCE has made arrangements for the margin system and the position limit system. The polished round-grained rice futures adopts the same gradient margin system with other products and sets up a threshold value to trigger the increase of margin in advance. And the margin of the contract in the delivery month will be adjusted according to different periods when the delivery date is approaching. Moreover, the polished round-grained rice futures adopts the phased and gradient position limit system for non-futures-company members and clients, in a bid to control potential delivery risks with the strict position-limit regulations.

Disclaimer: This English translation may be used for reference only. In cases there is any discrepancy between the English version and the original Chinese version, the original Chinese version shall prevail. Dalian Commodity Exchange may change or update this English translation without any prior notice and shall accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or change with regard to this English translation.

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