SHANGHAI - China's Dalian Commodity Exchange said yesterday it will introduce new contracts for non-transgenic soybeans on March 15 to conform to the country's rules on genetically modified organisms (GMO).
The exchange said in a notice on its Web site www.dce.com.cn it would roll out March, May and July 2003 non-GMO contacts on its screens after the China Securities Regulatory Commission (CSRC) gave the green light. The Dalian exchange, which was set up in February 1993 and also trades soymeal, said in the notice it was also drawing up corresponding GMO futures contracts.
"We are making changes to the contracts to go in line with the government's policies and regulations and to protect the domestic soybean industry," the official Futures Daily quoted an exchange official as saying.
The Chinese market expects volume of the new contracts to be paltry as traders separate GMO beans from non-GMO beans.
"Volumes will probably be really thin at the start even though specifications of the new contracts are quite similar to the old ones," said a trader at a Beijing futures brokerage.
"Investors need time to adjust to the idea of trading non-GMO soybeans only," he said.
A CSRC spokeswoman told Reuters she did not know when the GMO version contracts would be approved.
GMO BEANS IN FUTURES
Traders said the exchange's decision to unveil two different types of contracts could also be due to rising GMO content in soybeans for physical delivery.
"The contract details might look different in terms of moisture and purity specifications," said a trader in Shanghai.
The GMO contracts will probably be based on oil content, rather than grain consumption standards. Bioengineered beans tend to yield more oil and are mainly used for crushing, traders said.
Dalian soybean futures ignored the news yesterday as it did not affect physical delivery of existing contracts, which include GMO and non-GMO soybeans, for alternate months from March 2002 to January 2003.
The March 2002 contract expires this Friday.
Traders said they would have to conduct separate deliveries for the two sets of new Dalian contracts, which included applying for safety certificates for gene-spliced soybeans.
Yesterday, existing Dalian futures ended mixed, with the most active September contract inching up four yuan to 2,060 yuan ($249), while the change in most other contracts ranged from 12 yuan higher to five yuan lower.
"The market has already digested all sorts of GMO news and it is making minor adjustment before a clear trend emerges," said a trader with a Chinese futures brokerage in Beijing.
China has been trying to control bioengineered food imports with stringent GMO rules unveiled on June 6, triggering a Sino-U.S. spat that brought the $1 billion a year soybean trade to a standstill.
This week, China issued details of a compromise under U.S. pressure, temporarily relaxing the GMO rules from March 11 to December 20.
The transitional measures include shortening the approval time to 30 days from 270 days and issuing safety certificates that require less paperwork.:
