November 2, 2012
 

Russia may consider launching egg futures
 

Market players in Russia's Saint Petersburg Exchange may soon be able to dabble a different kind of trade, which is hen-egg futures.

Roman Goryunov, the president of NP RTS, a non-profit partnership that advises the OAO Saint Petersburg Exchange, said Thursday (Nov.1) the exchange was considering launching egg futures, although it was premature to talk about the timing.

Russia's egg market is valued at some US$3 billion but is plagued by significant volatility and huge price risks, since eggs don't fall into the category of lasting foods, Goryunov said on the sidelines of the Russian Money Market conference in Moscow.

Goryunov, the former head of Russia's RTS exchange who left the bourse after RTS merged with its rival Micex in 2011, said the new instrument would likely enjoy steady demand from outlets and producers for budget planning as well as hedging of risks related to time gaps between the initial investment, the date of production and the date of disposal.

Egg futures, which are likely to be cash-settlement contracts without actual physical delivery, could  join the ranks of other derivatives traded at the Saint Petersburg Exchange, such as futures on diesel, gasoil, wheat, corn, soy and cotton.

The idea was first put forward in late October by Ivan Tyryshkin, president of Rusgrain Holding, which produces 780 million eggs a year.

Prices for eggs, which account for 0.48% in Russia's consumer-inflation basket, according to the Federal Statistics Service, usually climb closer to the New Year holidays and before orthodox Easter. Many Russians prefer to spend the New Year period at home, cooking egg-containing dishes, while dyeing hen eggs is a tradition before orthodox Easter.