September 25, 2007

China to try live pig futures market in Dalian

In an effort to stabilize port production and consumption, China will launch a live pig futures market on a trial basis in Dalian.

Preparations for the pilot live pig futures market are proceeding and is expected to become operational early next year at the soonest, said executive vice chairman of China Meat Association Deng Fujian.

To develop live pig futures will help stabilize the pork production and consumption, narrow the irrational fluctuation of spot price, shelter pig raising, processing and trade enterprises from price risk effectively and improve the income of pig raisers, Deng noted.

In China, pig raisers usually find them in a vicious circle of making money in a year and losing money in the next. At present, only 20 percent of live pigs are raised by large-scale pig farms.

Deng pointed out that due to blocked communication of supply and demand information on the market, the supply on China's live pig market obviously makes a laggard response to the price.

The big hike of the pork prices since May is a concentrated reflection of such a kind of un-symmetric information, Deng added.

After the live pig futures are put on market, it will be conducive to forming of a national live pig price, thus intensifying China's say in the international trade of live pig, Deng said.