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Four years have passed since the rejection of our application to launch rice futures. During this period, the surrounding environment of rice production and distribution has changed dramatically. That is, in terms of production, an income subsidy policy will be implemented from this fiscal year for rice and participation in rice production adjustments are left to the discretion of individual farmers. In terms of price discovery, it has been difficult to find current market prices at the spot market of the Kome Kakaku (Rice Price) Center as transactions have declined.
For production and distribution of rice, competitive procurement and sales has intensified and there is a strong demand for fair and transparent price indicators as risk hedge needs against price fluctuations are growing.
In light of the major changes in rice production and distribution landscape since our previous application for approval to list rice futures, the Tokyo Grain Exchange Inc. will launch a “Rice Study Group” in order to reexamine the role of the rice futures market under the current policy environment. At the same time, address the various concerns of a rice futures market such as speculators and extreme price volatility.
