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China exchange hatches plan for egg futures
by Staff Writers
Shanghai (AFP) Nov 06, 2013

Spanish winemakers in China push at Hong Kong fair
Hong Kong (AFP) Nov 06, 2013 - Spanish winemakers said Wednesday they are pushing to make gains in the potentially vast Chinese wine market as they showcase their wares at one of Asia's largest wine fairs in Hong Kong.

The International Wine and Spirits Fair, which partnered with Spain this year, has attracted more than 1,000 producers from around the world, as the southern Chinese city cements its position as an international wine hub.

Spain, now the third biggest exporter of bottled wine to China behind France and Australia according to Chinese customs reports, is seizing the opportunity to introduce its products to one of the world's fastest growing wine markets.

"Consumers in China now have more curiosity for different wines," Jose Maria Nieves, the export director for Spanish winemaker Bodegas Julian Chivite, told AFP.

Because of this, there is "big potential" for Spanish wines, Nieves said, adding that Chinese consumers are venturing away from their favoured French products.

Another Spanish winemaker, Vintae, said its revenue from China this year had jumped to around 400,000 euros ($540,857) from less than 50,000 euros three years ago.

"When they become more knowledgable with wine, people are more open to try different wines," said Vintae Asia-Pacific managing partner Carlos Garcia Mangado.

French winemakers, however, say they are not worried about being crowded out.

"The most important thing for us is to keep the quality," said Jean-Francois Chabod, export sales director for Les Vignobles Foncalieu.

"We have to respect and go on with the quality we offer because we have a long-term vision for the Chinese market."

Hong Kong has become a gateway to the booming wine market in mainland China, which is expected to be the world's sixth largest wine consumer by 2014, according to leading global wine and spirits promoter Vinexpo.

The city overtook New York to become the world's biggest wine auction hub last year, thanks in large part to the expansion of personal wealth in China and the abolition of duties on wine imports in 2008.

The sixth International Wine and Spirits Fair runs from Thursday to Saturday.

Recognising that investors should not put all their eggs in one basket, a Chinese commodities exchange is offering a novel futures contract to hedge against risk.

The Dalian Commodity Exchange, China's main market for agricultural product trading, said it will begin trading chicken egg futures on Friday.

Futures are an agreement to deliver or take delivery of a commodity or financial instrument at a set date and price.

"As China's first livestock futures product and fresh agricultural product, the introduction of egg futures has profound meaning for the industry and development of the futures market," the exchange said in a statement.

China, the world's most populous country, is a major producer of farm goods to feed its more than 1.3 billion people.

The national retail price for eggs in China was around 3.82 yuan ($0.63) per half-kilogram on Wednesday, according to an industry estimate.

The exchange, which also trades China's benchmark corn and soybean futures, said the new product would benefit both farmers and companies. It will trade in five-tonne lots.

China is not the first to offer egg futures. But the United States stopped trading them in 1982 and Japan in 2010, the Dalian exchange said on its website.

Analysts said one challenge would be to guarantee quality and freshness of the eggs for buyers who take delivery.

China has grappled with both a widespread outbreak of H7N9 bird flu earlier this year which hit poultry sales and repeated food safety scandals, including cases of "fake" eggs uncovered by consumers.

But that has not deterred Chinese investors, who face limited choices on where to put their money given the country's strict controls over overseas investment.

"There's plenty of interest," Gao Yanbin, an analyst at Jinshi Futures, told AFP.

"Farmers and feed companies hope this kind of product will give them corresponding protection from spot prices," he said.

If the new futures contract is successful, it could lead to other types of "fresh" farm products such as live hogs, he added.

China has four futures exchanges including one trading financial instruments, which are competing to offer more products to cook up business.


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