June 30, 2008

South Korea to launch trading in lean hog futures

The South Korean Exchange announced Sunday ( June 29, 2008) it will begin trading lean hog futures on July 21, providing a hedging tool for swine breeders and pork processors to combat rising volatility in the markets.

Stability in food prices would benefit both producers and consumers, said Kong Do-hyun, a senior manager for product development at the Korea Exchange' futures market division.

Pork is the top product in the nation's meat production sector and ranks second only to rice in overall agricultural production output, according to data for 2006 from the Ministry for Food, Agriculture, Forestry and Fisheries.

The new index is based on a two-day weighted average price per kilogramme of lean hog in the wholesale cash market, calculated by South Korea' Animal Product Grading Service.

One contract unit equals 1,000 kilogrammes and will be settled in cash, said KRX.