Major pork consumer China turns to hog futures to hedge risks

Shanghai

CHINA is looking to hedge the cost of its pork addiction.

In a country that consumes half the world's pork, price swings have become so large that they hurt the ability of domestic producers to keep up with demand, even with a herd of 450 million pigs. Imports are the highest ever and exceed all other buyers.

The Dalian Commodity Exchange, China's largest marketplace for everything from corn and eggs to iron ore, says it may have a way to help minimise that risk: a hog futures contract. Dalian is planning to offer trading in hogs for the first time next year, according to two people who've been briefed about its plans.

The contract could help farmers, meat buyers and investors better plan…