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On November 9, jointly sponsored by Dalian Commodity Exchange (DCE) and Bursa Malaysia Derivatives (BMD), the 11th China International Oils and Oilseeds Conference (CIOC) was held in Guangzhou. Wang Fenghai, CEO of DCE, said in his speech that in the past 11 years, DCE has continued to deepen the cooperation with BMD in market cultivation, research, development of products and other fields, effectively boosting the market development on both sides. So far, DCE has listed No. 1 Soybeans, No. 2 Soybeans, Soybean Meal, Soybean Oil and RBD Palm Olein, and preliminary set up a relatively complete system of the products on the oils and oilseeds industry chain. In addition, thanks to the sound function of price discovery on the oils and oilseeds futures market, the mainstream mode of spot trade has gradually transformed from “fluctuating in line with market conditions” to “basis pricing”. At present, the basis pricing based on the futures prices has been adopted in the spot trade for 70% of the palm oil and 40% of the soybean oil. Currently, more than 90% of the oils and oilseeds enterprises with the daily crushing capacity above 1,000 tonne have participated in the trading on DCE, and more than 85% of the palm oil importers in China have been involved in the trading of the palm oil futures.
In terms of the market operation, the annual trading volume to open interest ratios of all oils and oilseeds futures products are about 1, at a relatively reasonable level. With regard to the market size, the trading volume of the futures products amounted to 552 million contracts from January to October, accounting for 46% of the total in China’s futures market of agricultural products. In terms of the trading volume, the soybean meal, palm oil and soybean oil on DCE ranked the top 5 with the soybean meal ranking first. Regarding the market structure, the enterprises clients have become the dominant force, and from January to October, the corporate clients held 60% of the open interest of the soybean oil futures, and 52% for both soybean meal and palm oil futures. In addition, the clients with the foreign investment background represented by the world’s four top grain dealers ABCD have taken high proportions of open interest on the soybean oil, soybean meal and palm oil futures.
