Recently, Dalian Commodity Exchange (DCE) has held a forum on “insurance + futures” pilot programs in Beijing. The pilot program combines the use of the futures market and agricultural insurance. It makes use of the futures market to transfer the price risks that insurance companies face, while helping to ensure basic earnings for farmers through means such as insurance products. At the forum, Mr. Fang Xing Hai, Vice Chairman of China Securities Regulatory Commission (CSRC) emphasized that the "insurance + futures" model is of great practical significance and worth promoting further. Therefore, all futures exchanges should respond to the central government’s call for steadily expanding the pilot program, by putting into more resources to summarize past experience and improve the operational model.
In 2015, DCE pushed forward the creation of the "insurance + futures" model with futures companies and insurance companies. In 2016, DCE launched 12 "insurance + futures" pilot programs in Heilongjiang, Jilin, Liaoning, Inner Mongolia, and Anhui, including 9 programs for corn and 3 for soybean, with 34,500 tonnes of soybean and 166,500 tonnes of corn insured in total. Zhengzhou Commodity Exchange has conducted the pilot programs for white sugar and cotton. Shanghai Futures Exchange is also making preparations for launching similar pilot programs.
