Agricultural futures have great potential, and the market has broad development prospects

The government is working hard to reform the marketization of agricultural products, which means that China's agricultural futures have great potential.

For a long time, relying on the weather for a living has been an unavoidable reality for farmers, and agricultural futures always seem to be "the last mile" away from rural areas. Farmers see it as close, but in fact it is still very far away. First, they lack professional knowledge; second, they lack risk awareness. Most of them regard futures as a "fiery monster."

In fact, the No. 1 Central Document has repeatedly proposed increasing the intensity of reform and innovation to accelerate agricultural modernization, and has required innovating the circulation methods of agricultural products, developing agricultural futures trading, and developing new varieties of agricultural futures trading.

The 2015 No. 1 Central Document proposed that domestic agricultural production costs are rising rapidly, and the prices of bulk agricultural products are generally higher than those in the international market. How to innovate agricultural support and protection policies and improve agricultural competitiveness under the "double squeeze" is a major test that must be faced.

China's agricultural resources are scarce, development is excessive, and pollution is worsening. How to ensure the effective supply and quality safety of agricultural products under hard resource and environmental constraints and enhance the capacity for sustainable agricultural development is a major challenge that must be addressed. The flow of urban and rural resource factors is accelerating, and urban-rural interaction and connections are strengthening. How to accelerate the pace of new rural construction and achieve common prosperity of urban and rural areas against the background of deepening urbanization is a major issue that must be properly resolved.

At present, China has listed more than ten agricultural futures varieties, including cotton, soybeans, eggs, and corn. Public information shows that the Dalian Commodity Exchange and the Zhengzhou Commodity Exchange are strengthening the research and development of new agricultural futures varieties. Cotton yarn, grain, oils and oilseeds, livestock products, forest products, and seafood products are all under research and preparation, and agricultural options are also striving to be listed and traded as early as possible.

Developing agricultural futures is very important for developing agriculture. On the one hand, "Suan Ni Hen" and "Dou Ni Wan" often cause farmers to encounter a price "roller coaster," and the futures market helps transfer risk and stabilize price fluctuations. On the other hand, with the current vigorous development of modern agriculture and large-scale agriculture, some scaled agricultural business entities have a need for price hedging, and futures provide a very good hedging tool.

In recent years, due to the impact of many changes in the global economy and frequent weather disasters, fluctuations in the international bulk agricultural product market have intensified. Against this background, China objectively needs an agricultural futures market with a sound system and complete functions.

At present, the government is leading the price reform of agricultural products, which may bring fluctuations in the prices of some agricultural products, and where there are fluctuations, there is risk. Therefore, actively promoting the development of new agricultural futures varieties and encouraging agricultural product production and operating enterprises to enter the futures market to carry out hedging business is precisely taking precautions against the possibility of increased risks of future agricultural product price fluctuations.

In the future process of new urbanization and agricultural modernization, listing more agricultural futures, making existing agricultural futures more refined and deeper, and giving play to the hedging function of the agricultural futures market are all indispensable. The experience of foreign agricultural futures in serving the real economy, as well as the examples of some Chinese agricultural enterprises effectively using the futures market, should all be promoted nationwide.

But in reality, if futures are truly to serve the "three rural issues," there are still some problems, such as investor education, the tax issue of farmers' cooperatives, and the shortage of rural futures talent, all of which limit the performance of the futures function.

Obviously, China's agricultural futures are still in the development stage, and compared with developed countries, there are still problems such as low coverage of futures varieties and an unreasonable investment structure. For this reason, it is necessary to further expand the depth and breadth of the futures market's service to the "three rural issues."

Industry insiders suggest that, first, the variety structure of the agricultural futures market should be improved. Second, the spot foundation of the futures market should be consolidated. In major agricultural product production areas across the country, a number of national-level key large-scale wholesale markets should be launched for construction, promoting product circulation and serving industrial development by solidifying the market foundation, and at the same time creating conditions for further improving the spot foundation of agricultural futures trading. Third, the cultivation of participants in the futures market should be strengthened, and the investor structure should continue to be optimized.