Lately, the CITIC Futures and China Insurance jointly organize the Forum on “Insurance + Futures” Assisting Breeding Enterprises in Feedstuff Cost Risk Management and the Claims Settlement Ceremony of the Heilongjiang Muyuan Nongmu Hog Feedstuff Cost Index. It is learnt that this is the first hog feedstuff cost index “insurance + futures” program in Heilongjiang Province and also one of the over 60 scattered pilot and registered programs of the DCE’s “Peasants Income Guarantee Plan” in 2019.
With regard to the design principle, this pilot program aims at helping breeding enterprises avoid hog feedstuff price decrease risks. China United Property Insurance Company purchases over-the-counter options from CITIC Futures and its subsidiary CITIC Securities Capital. Then futures companies and their subsidiaries can make use of the soybean meal and corn futures of DCE to hedge against risks dynamically by “copying the options” in the futures market. This program adopts the enhanced Asian options, and the overall average monthly price will be lower than the general Asian put options, which can increase the claim possibility and avoid the accidental influence of the price fluctuation in one day on breeders. And the average monthly price will be closer to client’s pricing mode in actual sales, and the feedstuff purchase amount of every month has been fully considered when the trading plan is made, thus further guaranteeing breeders’ rights and interests.