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In order to implement the spirit of “strengthening the construction of the futures market of the agricultural products and adding new futures products of agricultural products in due time” proposed in “Several Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Development of Modern Agriculture and Further Invigorating the Rural Development” (Zhong Fa [2013] No. 1), recently, China Securities Regulatory Commission (CSRC) approved the listing of the egg futures contracts at Dalian Commodity Exchange (DCE), in a bid to further improve the system of the futures products of agricultural products, meet the actual demands of the spot enterprises and better serve the development of the real economy. Based on the market conditions and the progress of the preparations, DCE will list the egg futures contracts in due time.
Egg (chicken egg) is an important livestock product in China, accounting for about 84% of the total poultry egg production, with the per capita annual consumption of about 18 kg. China’s total output of egg reached about 24.3 million tons in 2012, accounting for 36.5% of the global total, with an average market size of about RMB 185.6 billion in recent five years, ranking first in the world for 28 straight years. China’s egg consumption is mainly in the form of fresh eggs, with 53% for household consumption, 28% for non-household consumption (including the consumption in the food and beverage industry and the canteens of enterprises) and 19% for industrial consumption (including cleaning eggs, food industry and deep processing, etc.). The egg trade features clear logistics flows with the eggs mainly transported from Henan, Hebei, Shandong, Liaoning and other provinces with larger productions to the coastal provinces in South and Southeast China as well as Beijing, Tianjin, Shanghai and other cities. China’s egg exports amounted to 70,000 tons in 2012, mainly flowing to Hong Kong, and Macao.
In recent years, the factors such as the feed and the seasons have caused significant fluctuations of the egg price in China, which have substantially affected the normal operation of eggs in production, trade, processing and other processes. The listing of the egg futures will help further improve the egg price system and perfect the egg pricing mechanism, and conduce to the stable operation of the egg market as well as provide a necessary hedging instrument for the enterprises of egg production, trade and consumption, so as to push forward the industrialized and scale operation of eggs and promote the sound development of the spot enterprises.
After earnest research and in-depth survey, according to the actual situation in the spot market and the technical requirements for futures contract design, DCE has completed the design of the egg futures contracts and the formulation of the rules, having set up strict systems of trading, settlement and delivery, and demonstrated the risk controlling measures for margin, price limits and position limits, etc. the CSRC will guide and supervise DCE and the futures companies in effectively making preparations before the listing of the egg futures, in a bid to ensure the smooth listing and safe trading of the egg futures.
