Regulators in China, the biggest consumer of rapeseed after the European Union, approved trading in rapeseed and rapeseed meal futures to help companies manage risks amid rising imports and declining domestic production.
The Zhengzhou Commodity Exchange, one of China’s three futures bourses, has been approved to list the contracts, the China Securities Regulatory Commission said in a statement dated yesterday on its website, without saying when trading may begin. The exchange has had a rapeseed oil contract since 2007.
Rapeseed output in China, the biggest producer before 2011, has declined as farmers switched to more profitable crops. Imports, mostly from Canada, may jump 59 percent to 3 million metric tons in 2012-2013 from a year earlier, according to researcher Grain.gov.cn. A telephone call by Bloomberg to the exchange seeking comment was not immediately returned today.
“This will help Chinese importers and processors” as many of them have lost money due to a lack of tools to manage their so-called exposure, Tommy Xiao, an analyst at Shanghai JC Intelligence Co., said by phone from Shanghai. “It will also exert China’s influence on global prices,” he said.
China’s rapeseed output this year fell 9.1 percent to 12.2 million tons from a year earlier, the China National Grain & Oils Information Center said last month. China will consume 15 million tons in 2012-2013 compared with the EU’s 22.6 million tons, U.S. Department of Agriculture data show.