April 19, 2006

China's Dalian Exchange sets up delivery warehouse for GM soy

China's Dalian Commodity Exchange would be setting up a new delivery warehouse for its No. 2 soy futures, consisting partly of soybeans harvested from genetically modified crops, an official with the exchange said Wednesday (Apr 19).

The exchange has gotten approval from the government although no specific timeframe has been given, said Wang Weiyun, a spokesman from the exchange.

The new warehouse will be set up in Qingdao, which is in eastern Shandong province.

The exchange now has seven delivery warehouses for No. 2 soybean futures, located in Dalian in Liaoning province, Rizhao in Shandong province, and Nantong in Jiangsu province, all along coastal lines in the east.

The No. 2 soybean futures were launched in December 2004, in hopes of developing it into a risk-hedging tool for local market players to leverage on China's position as the world's largest importer of GM soybeans.

The exchange has revised contract terms hoping to boost its popularity and is setting up more delivery warehouses as a way to attract investors, analysts said.

Deliveries of both GM imports and non-GM locally grown soybeans can be made under No. 2 soybean futures contracts.