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Live hog is the agricultural product with the largest market size in China. In 2016, about 685 million hogs were slaughtered, and the market size exceeded RMB1 trillion long ago. The healthy and sustainable development of the live hog industry is of great importance for the social stability and people’s living standard.
Since 2003, China's live hog prices have formed four obvious cycles based on the lowest and the highest points in the price ranges, with the increases reaching 65%, 183%, 113% and 83%, respectively.
Over the years, the farming enterprises of live hogs have been strongly calling for the introduction of the live hog futures. However, in early periods, China's live hog farming was dominated by small-sized individual farmers, and there were many difficulties in designing the futures contract and the delivery system.
Carrying questions such as whether the spot market foundation has been well in place for the delivery of live hog futures, whether all the processes in the spot trading of live hogs are smooth and whether the risks are controllable, in late July, the reporters of various media units and the analysts followed the survey team of Dalian Commodity Exchange (DCE) to visit and inspect the live hog farming and slaughtering enterprises in Henan Province.
Based on the survey, the reporters and analysts said that after nearly a decade of development, the large enterprises in the live hog industry have achieved the standardization of the live hog farming process and the slaughter quality. The basic requirements for listing and trading of the futures contracts have been met, in terms of awareness, management, production size, sanitation conditions and other aspects.
