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DALIAN, China, July 6 (Reuters) - 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 said.
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 petrochemical products.
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 Jonathan Hopfner)