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Recently, China Securities Regulatory Commission has given a preliminary approval to DCE for listing hog futures at Dalian Commodity Exchange (DCE). Next, DCE will continue its preparation for launching hog futures. Hog is the largest livestock product in the world and the largest agricultural product in China, and its listing will provide Chinese hog breeding enterprises with an effective risk management instrument.
It is learnt that China has the largest hog slaughter amount in the world, accounting for about 57.46% of the total in the world, and its market scale exceeds RMB 1 trillion. The upstream and downstream industry chains of hog include feeds, breeding, veterinary drug, slaughter and foods, directly involving tens of thousands of enterprises and over 100 million jobs.
China’s hog breeding is of large scale and high standardization, providing a good basis for introducing futures trading. The proportion of pig farms with the annual slaughtering of over 500 pigs has increased from 27% in 2006 to 45% in 2016, and the slaughtering number of pig farms with the annual slaughtering of over 50,000 pigs has gone up from 2.97 million pigs in 2006 to about 55 million in 2016, taking up 8% of the total in China. And there are over 200 enterprises with the annual slaughtering of over 50,000 pigs. Meanwhile, the spot trading of hog is active, and its trading mode is relatively mature.
