China's apple farmers benefit from futures contracts
Thanks to "apple futures," Chinese farmers are now able to optimize their agricultural production an…Thanks to "apple futures," Chinese farmers are now able to optimize their agricultural production and sales. With the ability to reflect product prices in the upcoming season, apple futures have earned the interest of local fruit farmers in the city of Sanmenxia, in central China's Henan Province.
"With the futures prices in sight, there's no more haggling between outside buyers and local farmers," said Han Tonglei, chairperson of a local fruit cooperative. "Any price-related issues shall be referred to the futures prices."
The launch of apple futures on the Zhengzhou Commodity Exchange earlier this year, the first for fresh fruit, has allowed apple farmers to learn the market price of their products two months in advance and optimize their resources accordingly.
About 6,000 farmers from Sanmenxia have affiliated themselves with companies that specialize in apple production and trade. Then they began to grow apples according to futures contracts.
Fruit farmer Wang Shaofeng is now growing apples in his orchard under the guidance of a local fruit production company named Erxianpo. Erxianpo has been in partnership with many farmers to grow apples with futures contracts on a standardized platform. The company is also a delivery warehouse for apple futures designated by the Zhengzhou Commodity Exchange.
Xinhuanet.com reported how, this year, Erxianpo started to work with 100 villages in the city to develop 2,000 hectares of standardized orchards in an attempt to open more sales channels on the futures market.