context: As oilseed imports are diversified to new trade partners along the Belt and Road and market access expands in the wake of US–China trade tensions, more traders will do business domestically. Building an international oil and oilseeds future market not only improves price formation and demand prediction domestically, but also shifts power away from the US-based CBOT where dollar-denominated oilseed trading heavily influences global prices. DCE, one of four State Council-approved futures exchanges and the home of current oilseeds trading, will take the lead.

Dalian Commodity Exchange (DCE) is in the process of establishing a futures market for oils and oilseeds that will include international commodities, denominated in RMB, says Wang Fenghai 王凤海 DCE general manager in Futures Daily. Initial focus will be on soybeans and palm oil products, he says. His remarks, made at a meeting held jointly with Malaysia Derivatives Exchange (MDEX) in Guangzhou, connect the efforts to expanding development of agricultural trade with Belt and Road countries. He says the move will better serve international traders participating in the domestic market, and highlights ongoing work including

  • developing the oils and oilseeds futures market, promoting the internationalisation of oils and oilseeds categories
  • building a comprehensive, open-ended derivatives exchange
  • optimising the options market investor suitability review system
  • revision of rules around both no. 1 and no. 2 soybean contracts

Wang further noted broader efforts by DCE to introduce new services, including

  • expanding ‘ag insurance + future’ pilots
  • launching a ‘farmer income protection plan’
    • focused on soy
    • covering 300,000 tonnes of contracts
    • across 64 cooperatives, 8,000 farming households and two million mu of land
  • promoting research and development of futures markets for
    • live pigs
    • Japonica rice
    • chilli peppers
  • launching
    • ethylene glycol futures
    • corn options