July 10, 2020 / 8:08 AM / in a month

China's Dalian exchange starts simulated trading for live hog futures

SHANGHAI, July 10 (Reuters) - China’s Dalian Commodity Exchange began simulated trading for its live hog futures contract on Friday as it plans to launch what will be the world’s second such contract after lean hog futures in the United States.

The Dalian exchange said the simulated trading will help establish the rules and regulations of live hog futures trading, and help market participants become familiar with the trading mechanism before the formal listing.

This is the first time the exchange is conducting simulated trading for a futures contract, an exchange spokeswoman said.

China’s Securities Regulatory Commission, which announced the contract’s approval in April, said China’s pig industry was worth nearly 1 trillion yuan ($143 billion) and the futures contract would help market players manage risk. It, however, has not said when the contract would be launched.

Pork prices in China have seen wild swings in recent years, as an African swine fever outbreak swept through its hog herd in 2018, killing millions of pigs and reduced pork supplies. ($1 = 7.0089 Chinese yuan) (Reporting by Emily Chow; Editing by Himani Sarkar)

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