The central doc no 1 has called for building an agricultural product derivative market and steadily expanding the ‘insurance + futures’ pilot for two consecutive years, says a Dalian Commodity Exchange spokesperson, showing the agricultural product derivative market has an irreplaceable role in the process of price setting and promoting agricultural supply side structural reform, reports Futures Daily. Dalian Commodity Exchange will actively implement the spirit of central doc no 1 by

  • promoting options for soybean meal and other agricultural options to be traded as soon as possible
  • increasing R&D efforts for hog and other related agricultural product futures varieties
  • carrying out income insurance pilots on the basis of continuing the ‘insurance + futures’ pilot
  • continuously strengthening the ability of the futures market to serve the ‘three rurals’
  • improving the effectiveness of the futures market serving the agricultural real economy

Dalian Commodity Exchange will further expand the scale and scope of ‘insurance + futures’, says a representative of the exchange, and try to carry out income insurance pilots to push forward agricultural supply side reform.

Deepening the price formation mechanism for grain and other agricultural products as well as improving the agricultural subsidy system are key components to realising agricultural supply side structural reform, market participants told Futures Daily. Open, continuous, and transparent futures prices can provide an effective pricing reference for the spot market, reports the paper. The ‘insurance + futures’ model is an important tool to support agricultural marketisation reform as the futures market allows participants to hedge risk and is an important reference for price setting, reports Futures Daily, adding that agricultural product options can help guarantee earnings without additional losses for farmers.