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On April 3, Dalian Commodity Exchange (DCE) and Heilongjiang Agricultural Investment Group Co., Ltd. (“Heilongjiang Group” for short) sign a strategic cooperation agreement in Harbin. The two parties will engage in an all-round and in-depth strategic cooperation in terms of futures talent training, industry cultivation and development, market survey and information feedback, and market functioning and publicity, in a bid to jointly serve the national rural revitalization strategy.
Attending the ceremony are Wang Fenghai, CEO of DCE, Yang Baolong, President of Heilongjiang Group, Li Liguo, Party Chief and Director of Heilongjiang Provincial Securities Regulatory Bureau, and Luo Xufeng, General Manager of Nanhua Futures.
Yang Baolong says at the signing ceremony that Heilongjiang Group, as the agricultural industry investment and financing service platform and the agricultural cooperation platform of Heilongjiang, focuses on major fields of the agricultural industry and aims to provide strong support to increase farmers’ income, enhance agricultural efficiency and build Heilongjiang into an agricultural power. As the world’s largest agricultural futures market, DCE has committed itself to the exploration and practice of futures serving the “agriculture, rural areas and rural residents”. The signing of the strategic cooperation agreement has combined DCE’s advantage in the futures market and Heilongjiang Group’s superiority in the agricultural industry investment and financing platform and the spot operation, and integrated the grain depots, grain trading enterprises and all state-owned enterprises related to agriculture and grain in Heilongjiang. The two sides will make use of the futures market scientifically, and construct a general cultivation platform integrated with high-level talent training, industry cultivation and development, market survey and information feedback, and market functioning and publicity.
Wang Fenghai says that always adhering to the purpose of serving the “agriculture, rural areas and rural residents” and the real economy, DCE has actively conducted exploration and practice to hedge against the price fluctuation risks of agricultural products and stabilize farmers’ income. Since its establishment, DCE has studied and listed 10 agricultural futures and 2 agricultural options and developed into the world’s largest agricultural futures exchange, which has laid a basic foundation for serving the “agriculture, rural areas and rural residents”; it has carried out the "Rural Area Services Program" and other market service programs and implemented a series of pilot programs like “Company + Farm Household”, “Futures + Order” and over-the-counter options, which has effectively enhanced farm households’ awareness of getting close to the market and their production and operation level; it has rolled out the “Farmers Revenue Protection Plan” involving such business modes as “Insurance + Futures”, over-the-counter options and basis trading, and carried out 107 pilot programs in 16 provinces and areas across the country. In particular, DCE has conducted 36 pilot programs in Heilongjiang, and provided the service of income guarantee and increase for 115 cooperatives and 11,000 farm households, involving the total claim amount of over RMB 52 million.
He adds that Heilongjiang Group, a general agricultural industry platform in Heilongjiang, is featured by abundant agricultural-related resources, long industry chains and numerous enterprises. The two sides will keep strengthening their cooperation and complement each other’s advantages through signing the agreement, thus fully advancing the cooperation in the industry-finance base construction, the “Insurance + Futures” pilot, the “Order Agriculture + Insurance + Futures (Options)” pilot, the delivery warehouse distribution and the information exchange, further promoting the industry-finance combination and the futures-spot interaction, and fueling the agricultural development and rural revitalization of Heilongjiang.
Heilongjiang is the largest grain producing area in China with the agricultural acreage of 15.9409 million hectares, and its grain output reached 75.07 billion kilograms in 2018, realizing the growth in the 15th consecutive year. However, after the canceling of temporary purchase for corn and soybean, the aggregation of the agricultural products’ price fluctuations and the shortage in risk management measures have restrained the agricultural development, farmers' income increase, and the stability of the agricultural industry in Heilongjiang. By signing the strategic cooperation agreement, the two sides will give full play to the guiding function of the leading enterprise, allow agricultural enterprises to better make use of the futures market, provide them with effective risk-avoiding channels and improve the risk-avoiding capacity of the whole industry, which will be of great significance for expanding the width and depth of the futures market serving the “agriculture, rural areas and rural residents”, the real economy and the national strategy.
In recent years, DCE has built 20 industrial-finance cultivation bases with the help of leading industry enterprises. And their model effects have been shown to drive upstream and downstream enterprises to conduct risk management in the futures market.
