China will soon launch a new commodity futures contract as the country pushes for development of its commodity derivatives market. Starting from Aug. 18, cotton yarn futures will be trading on the Zhengzhou Commodity Exchange, with preparation work for the launch already completed, said the China Securities Regulatory Commission in a statement Friday [4 August 2017]…Full Article: Xinhua Aug 2017

Key Point

  • From August 5th to 12th, the Zhengzhou Commodity Exchange (ZCE) will conduct cotton yard futures trading tests.

ChinaAg Comments

  • In July 2017, the China Securities Regulatory Commission (CSRC) gave approval for cotton yarn futures to be launched by the ZCE.
  • In April 2017, the Zhengzhou Commodity Exchange (ZCE) launched white sugar options. At the time, China reportedly had 40 million sugarcane farmers. It should be noted that commodity options differ from futures contracts in that investors exercise the option to buy or sell the underlying assets at a predetermined price without the obligation to buy/sell.
  • In March 2017, the Dalian Commodity Exchange launched new soymeal options.
  • In December 2014, the Zhengzhou Commodity Exchange announced they would launch evening (21:00 to 23:30) trading for products such as cotton, sugar, and rapeseed meal in order to trade at the same time as New York’s Intercontinental Exchange (ICE).
  • In late 2013, the Zhengzhou Commodity Exchange (ZCE) expanded its rice futures contracts from one variety (Indica rice) to three rice varieties (e.g. short-grain rice – Japonica rice and late Indica rice).
  • In late 2012, the ZCE announced plans to expand to include rapeseed and rapeseed meal futures contracts.
  • Founded in 1990, the ZCE was the first experimental futures market approved by the Chinese State Council. The listed products on ZCE includes wheat (including strong gluten wheat and hard white winter wheat), cotton, white sugar, pure terephthalic acid (e.g. PET bottles), rapeseed (including rapeseed oil and meal), early long-grain rice and methanol.

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