China Stock Exchange to Start Trading Sunflower Oil Futures and Options on November 12

The China Securities Regulatory Commission has allowed the Zhengzhou Commodity Exchange (ZCE) to start trading sunflower oil futures from July 12. Now, market participants will be able to enter into contracts for future deliveries of this product and will contribute to the formation of exchange prices for it.

Initially, futures for May (SO2705), July (SO2707), September (SO2709) and November (SO2711) 2027 will be admitted to trading. The day trading session will take place from 9:00 to 11:30 and from 13:30 to 15:00 local time, and the evening session from 21:00 to 23:00. The initial margin is set at 8%, and the standard daily price fluctuation limit is set at 7%, with 14% of the base price on the first day of trading.

On the evening of November 12, the exchange will start trading sunflower oil options, which will initially be available for deliveries in May and July 2027. The commission for opening the option will be 1.5 yuan, but if the position is closed during the same session, no commission will be charged.

For physical deliveries, price differentiation is provided depending on the characteristics of the product. For example, for unrefined sunflower oil obtained by extraction, the discount will be 100 yuan/ton. For first-grade pressed sunflower oil shipped from certified factory warehouses, a premium of 300 yuan/ton has been established.

The launch of new instruments will improve the pricing mechanism in the domestic sunflower oil market of the PRC and provide market participants with additional opportunities to insure price risks. In the future, ZCE exchange quotes may become an additional indicator for sellers of vegetable oils, especially from the Black Sea region. However, this will depend on the liquidity of new contracts and trading activity.