(Adds exchange comment, link to factbox)
BEIJING Dec 16 China's securities regulator
said on Friday it had approved the launch of options contracts
for white sugar and soymeal, which will be the first
agricultural derivatives products in the world's biggest
The China Securities Regulatory Commission (CSRC) said in a
statement it had given the go ahead for the Dalian Commodity
Exchange to list soymeal options and for the Zhengzhou Commodity
Exchange to have white sugar options.
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. Users range
from commercial hedgers such as farmers and oil drillers to
institutional and speculative investors.
No launch dates were given, but the watchdog said
preparation work would take about three months.
"The sugar option will help sugar producers and dealers
better hedge risks...as it does not require market participants
to top up margins when futures prices move in unfavourable
directions," said Zhengzhou Commodity Exchange in a statement.
The relatively lower-cost options will also lure retail
investors to take part in futures trading indirectly.
Both exchanges posted draft specifications of the contracts,
including proposed lot sizes of 10 tonnes, and said they were
seeking feedback from the industry.
For sugar, the expiry months will be January, March, May,
July, September and November.
Dalian already has oil and oilseed futures, including
soybean, soybean meal, soybean oil and palm oil, and these
account for just under half of the trading volume in China's
(Reporting by Hallie Gu and Josephine Mason. Editing by David
Evans and Elaine Hardcastle)