Flu may accelerate hog futures launch

Special Report:
World Tackles A/H1N1
Flu

BEIJING, May 5 (Xinhua) -- 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 inmost 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.