July 22, 2008

South Korea has begun the trading of lean hog futures on Monday (July 21, 2008), the country's first agricultural commodity derivatives.

The futures trade will work as a hedging tool for swine breeders and pork processors to combat rising volatility in the markets. The derivative product will be traded from 10.15 am to 3.15 pm, based on the average nationwide pig prices in 11 markets, according to South Korea's bourse operation, the Korean Exchange (KRX).

Hog price volatility reached 27.2 percent last year, compared with 23.1 percent of the country's key stock index, KRX data revealed.

The KRX said hog futures will help farmers to secure a stable income source as the product will enable them to control price fluctuations.