(Adds comments, details)
DALIAN, China, July 6 China's Dalian Commodity
Exchange (DCE) is working on launching hog futures, but will
need more time for preparations, the exchange president Liu
Xingqiang told reporters at an industry conference on Wednesday.
"The launch of live hog futures will be an essential tool
for farmers to manage price risk ... I think it's only a matter
of time," Liu said.
However, with food inflation running high in part due to a
sharp jump in pork prices this year, Liu said some authorities
were concerned about the impact of futures on inflation and
farmers' livelihoods, and were therefore extra-cautious.
"We obviously hope to launch the contract soon, but because
of the concerns, we will have to do more preparatory work," Liu
Plans by DCE to launch live hog futures have been in the
works since 2007, but industry observers said they have been
delayed by regulators' deep concerns about speculation either
driving up prices or pushing them sharply lower -- hurting
either consumers or farmers.
Pork prices -- which have risen more than 60 percent over
the past year due to a combination of falling supply, soaring
corn prices and higher wages -- made the largest contribution to
inflation in May, when China's consumer-price index rose to 5.5
percent, the highest in nearly three years.
China, a nation of 1.3 billion people, is the biggest
consumer and producer of pork.
Separately, Liu said the DCE was looking at plans to launch
agriculture and energy-focused futures contracts, adding that
China's commodity exchanges need to increase their product
offerings to serve the hedging needs of Chinese businesses.
China's three commodity exchanges in Dalian, Zhengzhou and
Shanghai offer a combined 25 futures products, including a range
of base metals and agricultural products such as copper,
aluminium, sugar corn, and soy bean.
"Compared to other developed markets that have hundreds of
product offerings, we are still very far behind and there's a
lot of room to grow," Liu said.
The DCE has previously said that it was considering the
launch of japonica rice, a local rice variety in northeastern
China. It is also studying crude oil, electricity and
The Dalian Commodity Exchange, located in northern China,
is the world's second-largest agricultural commodity exchange
and the largest in Asia Pacific. Its trading volume dipped 3
percent in 2010 from a year ago to 403 million contracts.
(Reporting by Fayen Wong; Editing by Jacqueline Wong and