January 6, 2006

China's soy oil futures launch will boost market

On Jan 9, China will be launching soy oil futures in the Dalian Commodity Exchange. More participants and capital are expected to be attracted to the market because of this move.

Kang Bing, a soybean analyst with Beijing-based Jingyi Futures, said the long anticipated introduction of soy oil futures by crushers and traders would be a boost to the futures market.

With the launch of soy oil futures in the Dalian exchange, the bourse now has a complete soybean product line. The exchange also trades soybeans and soymeal.

China consumed about 7.5 million tonnes of soyoil last year, up from 3.67 million in 2002, making it the second largest consumer globally, after the US.

In the past, soy oil crushers and distributors had no way to hedge price-fluctuating risks. With this introduction, all soybean-related firms will have hedging tools.