May 6, 2019 / 8:54 AM / 4 months ago

UPDATE 1-China's Dalian exchange to open soybean, soymeal futures to foreign investors

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BEIJING, May 6 (Reuters) - China’s Dalian Commodities Exchange aims to open one of its soybean futures contracts to foreign investors this year, along with futures for soymeal, soyoil and palm oil, a senior official from the bourse told reporters on Monday.

Such access would highlight China’s efforts to allow more foreign participation in its domestic futures markets, as well as its ambition to gain greater influence over the pricing of its major commodity imports.

“We started with iron ore and will open up multiple commodities products,” said Wang Weijun, Dalian’s vice general manager.

Iron ore was the second commodity China opened to outside investors, following the launching of a crude oil futures contract in March aimed at competing with global benchmarks.

China also allowed foreign investment in domestic purified terephthalic acid (PTA) futures in September last year.

The exchange will need regulatory approval prior to opening up additional contracts to foreign investors.

The commodities exchange pledged to improve the trading mechanism of iron ore futures by proposing to include currencies other than yuan and the U.S. dollar to pay margin deposits for iron ore trading, Wang said.

Dalian exchange also plans to adjust the premiums and discounts for iron ore deliveries based on iron ore brands and quality to attract industrial investors - which use iron ore futures for hedging - and institutional investors, said Wang Shumei, another senior official with the exchange. (Reporting by Muyu Xu and Dominique Patton; Writing by Meng Meng; Editing by Tom Hogue)

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