May 1, 2008

Futures exchange means Wuhan would represent China's meat prices

China's first live pig futures delivery center would be built in Wuhan, capital city of the nation's central southern province of Hubei, according to an agreement inked by the city government and China National Cereals, Oils & Foodstuffs Import & Export Corporation (COFCO), the largest oil and food importer and exporter in China.

This meant that meat prices in the city would reflect the country's meat market, said Wuhan City Jiangxia County Vice Head Tu Yaping.

Zhengzhou Commodity Exchange (ZCE) Vice General Manager Mei Hongbin pointed out that the ZCE, the first experimental futures market approved by the State Council, China's cabinet, had 88 futures delivery bases, including 26 ones in central China, and would locate more bases there.

The vice general manager reiterated that the Zhengzhou exchange was preparing for the trade of paddy futures, raw silk futures and formaldehyde futures, adding that provinces in central China have advantages on agricultural resources and logistics, and are able to take the advantages by virtue of futures.

COFCO also signed an investment agreement with the Wuhan Municipal Bureau of Agriculture to construct another seven live pig ecological breeding farms in Wuhan City in 2008, with the total investment increasing from RMB320 million (US$45.8 million) to RMB570 million (US$81.5 million) and the pig quality to be the highest in the world, according to the Bureau.

With a total investment of RMB1.5 billion (US$214 million), the COFCO Hubei live pig ecological breeding project was initiated in Huangpi District in March and is the first project with an improved layout to see a 2 million heads live big breeding capacity.