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Polished Round-grained Rice Futures Listed, Adding New Instrument for Serving Agriculture, Rural Areas and Peasants

Date:22 August 2019
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At 9 o’clock on the morning of August 16, Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission (CSRC), and Tan Chengxu, Mayor of Dalian, jointly strike the gong for the listing of polished round-grained rice futures, marking its official listing on Dalian Commodity Exchange (DCE). This will add a new instrument to the Chinese agri-products futures market and further expand the scope of serving agriculture, rural areas and peasants.

Fang says in the speech that the polished round-grained rice is an important grain crop and one of the major edible rice for urban and rural residents, and it is also the crucial strategic supply concerning the national food security. Launching polished round-grained rice futures is a key measure of the CSRC and the Chinese futures industry to serve agriculture, rural areas and peasants and the national food security, and it will boost the stable operation and sustainable and sound development of industry enterprises. The polished round-grained rice futures will, together with japonica rice futures, form a complete price-finding chain from raw materials to products and contribute to improving the risk management instruments for the rice industry. DCE should well manage the follow-up work to ensure the smooth listing and stable development of polished round-grained rice futures and serve the peasants and industry clients.

He adds that while natural factors are bringing few risks to agriculture, the market supply and demand has tended to bring more risks. As a result, preventing market risks has become an increasingly important part of agricultural risk management. To some extent, “whether it can be sold out, and at what price” has become more important than “whether it can be harvested”. If the futures market can effectively predict the future supply-demand situation, producers of agricultural and livestock products would be able to arrange the investment and production in the next stage more appropriately in accordance with the direction of the futures market, thus maximally narrowing the gap between supply and demand and effectively reducing the length and fluctuation of the price cycle. This shows that industries with high fixed cost present ample space for futures, and the futures market is favorable in a wider field far more than the present bulk commodities.

Jin Guowei, Vice Mayor of Dalian, says that under the context of promoting the high-quality economic development, the polished round-grained rice futures is listed at the right time. Northeast China is the main producing area of polished round-grained rice, and Dalian is the main trading and logistics distributing center. The listing of polished round-grained rice futures is of great significance for giving play to Dalian’s advantages in location, transportation and trading, further improving the futures and spot goods system, consolidating its core position in the northeast grain circulation pattern and the domestic grain futures and spot trading, and assisting Dalian in building an international logistics and trading center in Northeast Asia. He says that Dalian will fully support DCE to build the international bulk commodity pricing center and the risk management center, thus assisting Dalian in playing a leading role in the all-round revitalization of Northeast China.

Ren Zhi, Vice President of the China National Association of Grain Sector, says that the polished round-grained rice industry is closely related to the trading and storage of japonica rice. Maintaining the stable supply-demand and price in the market is of great significance for guaranteeing the supply of polished round-grained rice and promoting the sound development of the industry. At present, as the marketization degree of the rice industry chain keeps increasing, the grain industry is in urgent need of the instrument for price finding and risk management and control. Being capable of price finding and risk management, the futures market has played a crucial part in ensuring the national food security. By giving full play to its roles in hedging and price finding, the listing of polished round-grained rice futures will facilitate the integration of industries and the steady operation of enterprises, benefit the “insurance + futures” and other industry service programs, and help peasants to increase yield and income, thus serving the agriculture, rural areas and peasants and safeguarding the national food security.

DCE Party Chief and Chairman Li Zhengqiang says that polished round-grained rice is a vital rice variety in China, which connects the mass croppers in the upstream with the numerous processing enterprises and terminal consumers in the downstream, and it occupies a crucial position in the national food security. DCE will well prepare for the listing of polished round-grained rice futures and join hands with all parties to well cultivate and maintain the polished round-grained rice futures market, thus facilitating the functioning of the market. He stresses that the high-quality economic development in China has raised higher requirements on the futures market. DCE will, according to the requirement of “4 respects and 1 joint force” put forward by the CSRC, keep consolidating the stale development trend, the harmonious ecological environment and the results of strategic transformation, continue to enrich the connotation of a diversified and open market, and continuously increase the market operation efficiency, the industry enterprises’ participation degree and the futures price’s influence and its capacity of serving the real economy, with an aim of building an international first-class derivatives exchange soon.

Guests from relevant state departments, local governments, industry associations, the industry circle and the financial circle were present at the launching ceremony for polished round-grained rice futures. Luo Hongsheng, Director of the Futures Regulation Department of the CSRC, reads out the approval document; DCE CEO Wang Fenghai presided over the launching ceremony.

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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