Today, the Tokyo Grain Exchange Inc. (TGE) submitted an application to the Minister of Agriculture, Forestry and Fisheries for the authorization of Market Rules and Regulations Governing Brokerage Activity for the pilot listing of rice futures.
Yoshiaki Watanabe, president, commented, “In regards to the pilot listing of a rice futures product, the present environment surrounding the production and distribution of rice has greatly changed. Amid the rising demand for a price benchmark and a risk management instrument against price volatility and excess stock risks, a rice futures market would be a tool to assist promoting stabilization of the operations for rice commercials.”
The study group that was set up in July analyzed concerns of the role of a rice futures market and the lingering anxiety towards futures trading. In December a research paper from the study group suggested a pilot listing of rice futures for a limited two year period in order the verify the benefits and concerns. Based on this proposal, a working group for the design of a rice futures product was set up in February this year to examine the design of the market, delivery process and market surveillance to design a rice futures market that would be user friendly for those involved in the rice industry and came to a consensus of opinion.
Immediately thereafter, the Board of Directors approved a resolution to revise the Market Rules and Regulations Governing Brokerage Activity required for a rice market and today the Exchange has submitted an application for approval to the Ministry.
Hereafter, for greater close interaction with those in the rice industry, we would like to consider in what way rice futures will benefit the operations of the rice commercials and its impact etc. on rice production and distribution. We would like to ask for your further support and cooperation.”