April 18, 2007

China's Zhengzhou bourse ready to launch rapeseed oil futures
 

China's Zhengzhou Commodity Exchange has almost finished preparing for trading in rapeseed oil futures contracts, and should be ready to launch trading within a month of getting regulatory approval, an official at the exchange said Wednesday.

However, Liu Shaohua, director of the research and development department at the exchange, did not say when the China Securities Regulatory Commission might give such approval.

Fourth-grade rapeseed oil futures contracts would be traded on the exchange, he said.

Domestic prices of rapeseed oil have been fluctuating recently due to reduced output in China, as farmers prefer to grow wheat to take advantage of government subsidies.

By entering into rapeseed oil futures contracts, producers and processors will be able to hedge against future price swings.

Rapeseed oil can be used to produce biodiesel, a cheaper substitute for crude oil.

China is the world's largest rapeseed oil producer and consumer. Rapeseed oil imports grew more than 10-fold in January-February to 53,696 tonnes from the same period the year before, while exports rose 35 percent to 15,411 tonnes.