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Corn Options Listed on DCE, Industry Service Entering A New Stage

Date:29 January 2019
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At 9 o’clock on the morning of January 28, Li Zhengqiang, Party Chief and Chairman of Dalian Commodity Exchange (DCE), and Jin Guowei, Deputy Mayor of Dalian, jointly struck the gong for the official listing of corn options on DCE. Guests from relevant national departments, local government, industry associations, the industry circles and the financial circle were present and witnessed its listing. DCE Deputy Party Chief and CEO Wang Fenghai presided over the listing ceremony.

Yan Shaoming, Deputy Director of the Department of Futures Supervision of the China Securities Regulatory Commission (CSRC), said that the simultaneous listing of three commodity options products, namely corn, natural rubber and cotton, on the three commodity exchanges has unveiled the curtain of products listing in the Chinese futures market in 2019. With the largest output in China, corn is at the top of the industry chain, involving such fields as egg, hog, starch and alcohol. After 15 years of smooth operation, the corn futures has offered the corn industry with an effective risk-avoiding instrument. And the launching of corn options will provide relevant industry enterprises with more refined risk management instruments, play a positive role in guaranteeing rural residents’ income, enhancing the level of “insurance + futures” and exploring the new mode for agricultural development, and offer a strong support for the rural revitalization and the supply-side structural reform in agriculture. He said that the Department of Futures Supervision will focus on the mainline of serving the real economy to intensify the risk prevention, the strict and comprehensive regulation by law and the institutional improvement in the new year. And it will continue to increase the market supply, improve the market quality and accelerate the opening-up, and seize the momentum to guide the sound development of the futures and derivatives markets.

Jin Guowei said that the listing of corn options would better meet the relevant industries’ demand on risk management and enrich the product species of DCE and the domestic commodity futures market. It would be of great significance for improving the Dalian futures market’s capacity of serving the real economy, accelerating the construction of an important international derivatives trading center and promoting the construction of Dalian regional financial center and the 2 pioneering areas in the industry structure optimization as well as the social and economic development. He said that Adjacent to the northeastern corn producing area. Dalian is the key corn distributing center and foreign trade port in China. DCE’s experience in and capacity of risk management in the corn industry will further enhance Dalian’s position in corn storage and trading, which is crucial to guarantee the national grain security and facilitate the revitalization of Northeast China. The Dalian Municipal People’s Government would support the development of DCE with unprecedented measures, give full play to its leading role, and greatly develop the futures market, in a bid to make greater contributions to the reform and development of the Chinese futures market.

Ren Zhi, Vice President of the China National Association of Grain Sector, said that corn is a key grain product indispensable for the development of agricultural economy and the improvement of rural resident’s life. Judging from the reality in China, corn is the first largest grain product whose annual output and consumption both exceeded 200 million tonnes in recent years. Corn is of extensive use, and it has a huge potential for deep processing and the longest industry chain in the grain industry. Its market supply-demand and stable operation is the key to the national grain security and the sound development of the industry. As the new mechanism of “market-set prices, price-compensation separation” has gradually formed after the adjustment to the corn purchase and storage policy, enterprises have paid more attention to the price trend. Spot corn enterprises have been eagerly looking forward to the early listing of corn options, so that they would have a more refined risk control instrument.

Li Zhengqiang said in his address that corn options is the 2nd options product of DCE. It is the result of summarizing the experience of the listing of soybean meal options and gradually enriching options products and also the result of summarizing the experience of corn futures and corn starch futures and exploring the new instrument and method of serving the corn industry. The listing of corn options would help to improve the structure and operation mechanism of the corn derivatives market, construct a market system with mutual-connected and mutual-benefiting futures and options market, over-the-counter and floor markets, and spot and derivatives markets, and facilitate the cultivation and participation of institutional investors. And it will further optimize the structure of market participants, help industry enterprises to reduce cost and improve their operation by making use of the derivatives market, promote the marketized reform of the corn industry, and make it better serve “agriculture, rural areas and rural residents” and the rural revitalization strategy.

He stressed that in the new year, DCE will firmly bear in mind the key instructions of General Secretary Xi Jinping and deeply study and implement the requirements of the 19th CPC National Congress. According to the principle of “consolidating, enriching and improving”, DCE will keep consolidating the achievements of strategic transformation and development, enriching the connotation of the diversified and open development and enhancing the core competitiveness of serving the real economy, and focus on solving the two major contradictions of not adapting to the great risk management demand of the real economy and to the new trend of the open and diversified development. It will stick to the reform and innovation and strive for the early completion of building a bulk commodity pricing center and a risk management center in the world.

Guo Liang, Chief of the General Office of the Department of Futures Supervision of the CSRC, read out the approval document. DCE held the Forum on Corn Options Serving the Real Economy after the listing 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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