May 26, 2006

China sets up new delivery house for soybean futures

China's Dalian Commodity Exchange (DCE) said Thursday (May 25) that a new delivery warehouse for its no. 2 soybean futures was put into use recently in Qingdao, located in Shandong province.

Aiming to boost inactive trading for no. 2 soybean futures, which encourage the delivery of genetically-modified soybeans, the exchange has increased its delivery warehouses and revised its contracts.

The DCE set up four warehouses in the eastern Jiangsu and Shandong provinces this year to facilitate delivery, making a total of nine.

No. 2 soybean futures contracts allow deliveries of both GM imports and non-GM local grown soybeans, and some market analysts said no. 2 soybean futures are likely to replace the currently more-active soybean futures eventually.

A total of 250,000 tonnes of soybean imports were delivered in 2005, according to the exchange.

No. 2 soybean futures began trading in Dec 2004, amid the hope of developing it into a risk-hedging tool for local traders, as China is the world's biggest importer of GM soybeans. 

Total imports of soybeans reached 26.6 million tonnes in 2005, up 31.4 percent from 2004.