The demand for commodity futures as hedging tools has been on the rise as the Chinese economy continues to advance at a brisk pace. The country is now one of the largest producers and consumers of a wide range of commodities, including oil, steel, copper, corn, wheat and soybean. To diversify their product ranges, the nation’s three commodity futures exchanges are doing research to introduce new contracts.

For example, the Shanghai bourse plans to launch new contracts on nickel, silver and steel futures in the coming years. The Zhengzhou bourse is preparing to launch early long-grain non-glutinous rice futures, while the Dalian bourse is preparing to introduce hog futures to protect hog breeders from being exposed to sharp price swings.

As a major producer and consumer of commodities, China has large potential for developing its futures market. China’s commodity futures markets have expanded product ranges and deepened liquidity pools to cater to the increasingly diverse needs of the nation’s rapidly growing economy.

With increasing volatility in global commodity markets and prices, companies have been expanding their agricultural product, precious/base metal, fuel oil and other commodity-related investments in China.