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在线翻译:
szdaily -> Business_Markets -> 
Corn and cotton options win nod
    2018-06-13  08:53    Shenzhen Daily

THE government has approved the launch of corn and cotton options, two of the country’s commodity exchanges said, as it expands the range of tools available to hedge against price swings in agricultural markets.

China launched soymeal and sugar options earlier this year, the first agricultural derivatives products in the world’s biggest commodity market.

It is not clear when the new products will be launched, but approval by the China Securities Regulatory Commission is a first step to making them available for trading.

Options give the holder the right to buy or sell a commodity at a particular strike price and are widely used in Europe and the United States by investors across commodities.

China is the world’s second-largest consumer of corn, and corn futures on Dalian are the country’s second-largest agricultural product derivative market by volume.

The exchange added that hedging needs have increased following recent policy reforms that have seen China abandons State stockpiling of the grain and allows the market to play a bigger role.

The news comes amid heightened volatility in cotton futures, which have rallied 18 percent from early April to the end of May, fuelled in part by worries over crop damage from strong rains, as well as by heavy speculation.

Options will help medium and smaller-sized traders and processors of cotton, which face high costs and have low capabilities for handling risk, the Zhengzhou Commodity Exchange said in a statement.

Meanwhile, China will import 1.4 million tons of cotton in the 2018/19 crop year, the Agriculture Ministry said yesterday, raising its forecast from last month’s 1.2 million tons.

The higher estimate was due to a larger-than-expected production deficit, with Chinese consumption of the fiber growing 1.2 percent from the previous year’s level to 8.4 million tons, it said.

The ministry repeated that domestic cotton output would fall 5.8 percent to 5.6 million tons due to a reduction in planting.

“China’s cotton production deficit next year is clear,” the ministry said.

The ministry added that although storms and low temperatures had hit top growing region Xinjiang, overall the weather was normal, with yields expected to fall less than 1 percent.(SD-Agencies)

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