The spread of influenza A/H1N1, firstly known as swine flu, is likely to hasten the launch of China's hog futures trading, Tuesday's China Daily reported.
As a result of the widespread flu, hog prices have dropped from 13.41 yuan (about 2 U.S. dollars) per kilogram in January to 9.88 yuan in April, according to data from Beijing Orient Agribusiness Consultant Co Ltd (BOABC).
"The launch of livestock futures may help to lock in the price of the product, and protect hog breeders and processors from drastic price swings," said Feng Yonghui, chief analyst from AND Group, a Beijing-based agricultural service provider.
"Hog prices fell even more last week, to below 8 yuan per kg in most cities of north China, due to the shrinking demand arising from a fear that eating pork products would result in contracting the virus," said Feng.
The State Council announced a stimulus to boost agricultural development and increase farmers' incomes early this year, which, for the first time, said the government would adopt measures like futures exchanges to develop the hog breeding industry.
Dalian Commodity Exchange started a trial run for livestock futures delivery in 2007, but the trading proposal is still waiting to get the nod from top authorities.
However, some market observers believe that hog future trading was unlikely to take place this year.
"How to set the standards to examine and quarantine livestock is one of the major concerns. Unfortunately, the possible eruption of influenza A/H1N1 adds more pressure on the authorities to approve the introduction of hog futures," said Guo Huiyong, an analyst with BOABC.
(Xinhua News Agency May 5, 2009)
