.jpg)
Dalian Commodity Exchange (DCE) officially listed the egg futures contracts on November 8 and the first corporate participating in the trading was the corporate customer of Changjiang Futures – Wuhan Shendan Agricultural Science and Technology Co., Ltd. It has got the first order of the egg futures through its seat in Changjiang Futures through selling egg futures 1403 contract in the call auction stage and its counterparty is an investor.
It is learnt that Wuhan Shendan Agricultural Science and Technology Co., Ltd. is the wholly-owned subsidiary of Hubei Shendan Healthy Food Co., Ltd., a top 3 egg product enterprise in China. Hubei Shendan is a key national leading enterprise of agriculture industrialization, mainly engaged in egg products manufacturing and also involved in feed processing and breeding poultry raising, with the annual amount of processed and sold eggs of 100,000 tons. It has the first egg market share across the country for consecutive four years and its products have accessed over 10,000 large supermarkets and been exported to international markets such as Japan, Korea, America, and Australia. Hubei Shendan is also the egg supplier of McDonald and KFC.
Li Qingyi, Executive Deputy General Manager of Hubei Shendan, introduced that Hubei Shendan has planned ahead and begun to take part in futures products trading like the soybean meal and to engage in risk management for several years. Having learnt that DCE was to list the egg futures, it has made immediate preparation, got familiar with contract rules, and designed the hedging plan, thus getting ready to participate in the trading on the first day of the listing of egg futures on November 8.
“We are confident in the prospect of the egg futures and Hubei Shendan is to make full use of the egg market.” Li Qingyi introduced that with egg futures as risk management tool, Shendan will decide the time and quantity of laying hen seedling and weeding in accordance with the egg price trend in the futures market and timely adjust the scale of laying hen breeding, so as to lead the egg industry to the right track. Meanwhile, it can also protect farmers’ interests and avoid the situation of slaughtering large amount of laying hens in sluggish market and swarming into laying hen seedling in booming market.
He also said that with regard to the situation that farmers can hardly make profits in the off season of egg consumption with low selling price, Hubei Shendan will adjust the contract price in time according to the egg futures price so as to stabilize the breeding group and protect farmers’ interests. At the same time, as the supermarkets supplied with Shendan eggs maintain a relatively stable retail price, enterprises would suffer great operation pressure during the fluctuation of fresh egg prices. With regard to this, it will use hedging to lock in the operating profits.
The broker of the first egg futures trading of Shendan is Changjiang Futures. Tan Xianrong, President of Changjiang Futures said that Shendan Group’s obtaining of the first order of the egg futures has opened the curtain of the enterprise’s participation in the hedging of egg futures.
Tan Xianrong said that China is the largest egg producing and consuming country in the world. However, the relatively low transparency of egg price in China’s market and the great price fluctuation has not only added more risks to hen-raisers but also gone against the consumers. The launching of the egg futures will provide laying hen farmers and the broad practitioners in the industry with an important tool for price guiding and risk avoiding and will also prevent the great fluctuation in egg price, thus guiding farmers’ production and making the breeding industry steady. Besides, the listing of egg futures will also help to enhance enterprises’ competitiveness and promote the upgraded development of the industry.
It is introduced that Changjiang Futures has previously planned and carried out a series of futures trainings for the key enterprises in the egg industry within Hubei Province, thus allowing related enterprises to have a detailed understanding about the futures market and to grasp the concept and operating mode when participating in futures market,getting ready to participate in the egg futures trading at the very beginning.
