Zheng Shang: Building International Textile Products Derivatives Trading Center

Cotton options were listed on the Zhengzhou Mercantile Exchange in January 28th.

The futures contracts on the first day of the cotton option contract are CF1905, CF1907, CF1909 and CF2001.

China is the largest textile producer, consumer and exporter in the world, and cotton is an important raw material for the textile industry.

In 1999, the state deepened the reform of the cotton circulation system.

After the reform, the price of cotton purchase and sale was liberalized and basically formed by the market. Cotton production remained basically stable and cotton operation channels gradually expanded, but there were also problems such as low cotton quality and high price fluctuation.

In June 2004, in order to serve the reform of cotton circulation system, Zheng Shang listed cotton futures.

Since the launch of the cotton futures market, the market has been running smoothly, the number of participating industrial enterprises has been increasing, and the authority of cotton futures prices has been increasing. It has gradually become an important reference for the government's macroeconomic regulation and control and domestic and foreign cotton trade. It has provided an effective risk management tool for cotton textile enterprises and the vast number of cotton farmers, and has played an important role in stabilizing cotton production and improving cotton quality.

In 2014, the country began to implement the cotton target price reform.

In order to reform the target price of services, Zheng merchants set up a cotton futures delivery warehouse in Xinjiang and adjusted the benchmark delivery place of cotton futures from the mainland to Xinjiang, further consolidating the advantages of Xinjiang's main cotton producing areas.

Zheng Shang also launched cotton futures into Xinjiang, and the Xinjiang local financial supervisory authority jointly organized a training course for thousands of local financial talents, and vigorously fostering Xinjiang cotton futures market.

We have steadily expanded the pilot program of "insurance + futures" for cotton, supported 28 pilot projects of "insurance + futures", and actively participated in the formulation of the Xinjiang Uygur Autonomous Region cotton "insurance + futures" pilot scheme, while promoting cotton farmers' steady income and income increase, and explored and improved a new mechanism for subsidized agricultural product prices.

The listed cotton options will better meet the diversified and individualized hedging needs of industrial enterprises, reduce the risk hedging cost of the "insurance + futures" trial, enhance the overall effect of the "insurance + futures" pilot scheme, and provide a useful reference and effective supplement for the current cotton price subsidy policy, which is another important measure for the reform of the target price of cotton by Zheng Shang.

"On behalf of the China Securities Regulatory Commission, I would like to extend my warm congratulations to the Zhengzhou Commodity Exchange on behalf of the vice chairman of Fang Xinghai."

Luo Hongsheng, director of the futures regulatory department of the China Securities Regulatory Commission, said at the ceremony of the cotton option listing that the listed cotton options can help to improve the price discovery mechanism, promote the upgrading and optimization of the industrial structure, and help enrich the risk management measures of cotton enterprises, stabilize the production and operation of cotton textile enterprises, and promote the steady income and increase of cotton farmers.

After the cotton option is listed, cotton futures, options, insurance and other financial instruments cooperate with each other, which is of great significance for deepening the reform of target price, exploring new agricultural support and protection system and improving agricultural subsidy policy.

The Zhengzhou mercantile exchange should strengthen market supervision, firmly establish risk awareness, and actively guide industrial enterprises to manage risks with options, so as to effectively promote the functions of cotton futures and options.

Wang Jianhong, Secretary General of China Cotton Association, holds that cotton options have unique advantages in hedging costs, capital management and hedging strategies, and can better serve the pformation and upgrading of enterprises and enhance their competitiveness.

The scale of cotton production and circulation in China is small, the capital pressure is high, and the ability to resist risks is weak. Therefore, it is more necessary to make use of option management risk.

The majority of cotton enterprises should correctly understand, actively learn and make rational use of option tools. Under the premise of strict control of risks, we should explore new ways of using option management risk and constantly improve the ability to control the market in the new situation.

Chen Huaping, chairman of Zheng Shang, said that the implementation of cotton, cotton yarn futures, cotton options and related off-site products, as well as the internationalization of PTA futures, made Zhengshang become the most diversified and most complete international textile product trading center.

"Next, we will strive to build the center for pricing and risk management of international textile products".

Chen Huaping said that Cheng will make efforts to do the following work: first, according to the needs of the industry and the market operation, the international futures and options rules system will be continuously optimized, and the relevant foreign breed rules and regulations will be continuously optimized, and the domestic and foreign textile enterprises should be actively guided to make use of the futures options market, giving full play to the futures futures market function and better meeting the needs of pricing and risk management in the real economy.

Two, we should always focus on prevention and control of market risks, strengthen monitoring and monitoring of market operation, detect and handle abnormal pactions in a timely manner, effectively maintain market order, and promote stable operation of the market.

The three is to study and introduce more new varieties and tools such as short staple futures and PTA options, further improve the derivatives system, and strive to make greater contributions to the service of the real economy and major reform initiatives in the service sector.