China's egg industry has undergone a series of adjustments and changes, the market scale has grown steadily, the level of industry standardization, scale and intensification has been significantly improved, and the high-quality development of the industry has been further stabilized. As China's first fresh animal husbandry variety, eggs have been running smoothly and influencing since they were listed on the DCE on November 8, 2013, and have contributed to the adjustment of the service industry and the promotion of industrial upgrading. Industry insiders said that the understanding of the laying hen breeding industry is deepening, and the function of the market to serve the "three rural" has gradually been playedEggs** provide an indispensable risk management tool for the livestock industry.
Avoid fluctuations and effectively stabilize costs
Looking back on the past 10 years, from the region to the scale, from the sales model to the level of breeding, the laying hen breeding industry has undergone qualitative changes from 10 years ago. The industry concentration is getting higher and higher, the quality is getting better and better, the management is becoming more and more standardized, and the participants are becoming more and more professional. Liang Chengqiang, the delivery commissioner and investment manager of Guangdong No. 1 Food Co., Ltd., said.
Hubei Xishui eggs from poor quality to quality in the forefront of the country, from the reference to other regions to the leading role of the country, this process only took a few years, these are from the egg evolution of the results. Yan Tieshan, chairman of Hubei Jiameixian E-commerce, said that in the past 10 years, the egg industry has invested heavily and risked in the process of developing from primitive breeding to large-scale enterprises. After the egg is listed, from breeding hedging to insurance and then to analysis, it has played a leading role in the industry, especially the delivery quality standards have promoted the gradual formation of industrial spot standards to a certain extent, and the quality of eggs has improved by leaps and bounds in just a few years.
In addition, during the loss of the egg industry in the first half of 2017, hedging not only helped some farmers, but also allowed some farmers to effectively avoid the risk of price drops. Since then, the industry has found an advanced development direction from the first market research and environmental protection trends, and large-scale aquaculture has begun to appear in Xishui. The industry is showing a trend of intensification, standardization, standardization and scale, and under the guidance of the leading trend, the risk aversion ability has been improved.
Suzhou Oufu Egg Industry Co., Ltd. purchases about 70,000 tons of eggs annually, with a purchase amount of 800 million yuan, and the main products are egg products such as egg liquid, egg powder, and egg pre-products. The company has actively participated in research since the beginning of the listing of eggs, and in 2014, it became the designated delivery warehouse of DCE's eggs. Han Taixin, vice president of the company, said that in the past 10 years, the compound annual growth rate of egg processing capacity has reached more than 15%, and many excellent enterprises have emerged in the industry, the industrial scale has been expanding, the market capacity has been growing, and the service level has been continuously improved. In 2017, the company used the "Asian call option" to insure the price of 3,000 tons of eggs in three batches, thus successfully avoiding the risk of egg price increase from the end of 2017 to the beginning of 2018, and effectively stabilizing the cost and business operation.
In Han Taixin's view, the biggest change in the past 10 years is that the practitioners of the industry will pay attention to whether they are involved or not, and many aquaculture practitioners will adjust their breeding volume according to the forward contract, avoiding the loss caused by the periodic excess, and there are many practitioners who adjust their inventory according to the delivery of the industry, especially in the delivery of the month, the business is through the delivery of the business, to avoid the adverse effects of fluctuations.
In fact, eggs, as the first fresh animal husbandry product in China, are faced with many difficulties such as difficult storage of products, small scale of enterprises, and difficult delivery management. Based on this, DCE has adhered to the working idea of "one product and one policy" for many years, and after full research and extensive solicitation of opinions from delivery warehouses and industrial enterprises, it has continuously improved the matching degree of egg futures and spot by expanding the delivery area, adding contracts, modifying delivery quality standards, and increasing delivery methods, so as to promote the gradual and effective play of the best function.
Improve the efficiency of industrial hedging and protect against risks
The pioneering contract design and continuous improvement of eggs, as well as the steady operation and effective function play, have played a benchmarking role for the listing of other fresh products in China, such as some contract rules of fresh varieties such as pigs, all of which have learned from the successful experience of eggs.
Wei Lei, general manager of the Yangtze River Feed Breeding Industry Center, pointed out that eggs are the first agricultural product varieties that are active in all contracts of DCE, which greatly improves the efficiency of industrial hedging.
In the past 10 years, eggs have developed from the main contract to become the main contract from January to December, which shows the rationality of the design of the egg contract, and we have been participating in hedging since its listing. From the analysis of ** to the spot **, it has helped the enterprise a lot, and our spot ** has changed a lot from the loss of confusion to the guidance of ** with the help of ** today;From not understanding at all to learning, and then to today's wide attention;From the traditional ** to the online and offline combination of e-commerce, etc., are the guidance given by the best tools, and we deeply feel the guiding role of the ** market. Yan Tieshan said.
According to market sources, compared with the broiler and pig industry, the scale of the egg industry is low, and the downstream consumption form is relatively simple, with 90% of the fresh egg consumption as the mainstay. This also leads to more risks in the production and operation of enterprises in its industrial chain.
For the laying hen breeding end, enterprises are affected by the fluctuation of feeding costs and finished products. The cost of feed accounts for more than 60%, and the raw materials of soybean meal and corn directly affect the cost of breeding, and the sales of eggs jointly determine the profit of breeding. In recent years, domestic soybean meal and corn have continued to fluctuate violently, which has pushed up the cost of breeding while compressing the profit of breeding and brought challenges to the stable operation of breeding enterprises. Wei Lei introduced that in terms of egg merchants, because fresh eggs have high requirements in terms of sales time, transportation and storage, most of them are on the market except for a small amount of egg reserves, so the purchase and sales of eggs will fluctuate sharply with the market, and it is relatively difficult to continue to make stable profits. Moreover, there is a substitution relationship between eggs and other meats, which further limits the bargaining and cost transfer power of the merchants, so the profits of the merchants are greatly affected by the fluctuations of the eggs. In addition to facing the same large cost fluctuations as the best merchants, egg processing enterprises have strong substitutability and greater consumption elasticity, so the bargaining power of processing enterprises is weaker, resulting in processing profits are more sensitive to changes in egg products.
Wei Lei said that upstream and downstream enterprises in the industrial chain can directly participate in the market, avoid the risk of fluctuations in eggs and feed raw materials through egg, soybean meal, corn hedging or soybean meal and corn on-site option hedging, and manage procurement costs, sales, inventory value or lock in industrial profits. Upstream and downstream enterprises in the industrial chain can also use tools such as over-the-counter options and "insurance +**" to protect the best risks in production and operation without direct operation.
Optimize contract rules and improve market liquidity
Over the past 10 years, DCE has closely combined the changes in the pattern of the egg industry and made three major adjustments and optimizations to the contract rules of the egg industry, providing favorable conditions for market participants such as layer breeding enterprises, first-class enterprises and egg processing enterprises to better hedge and spot transactions.
It is understood that in the early days of listing in 2013, the eggs used the standard warehouse receipt of a cut and the original delivery system of the cash delivery, however, the traditional one-time cut is unable to meet the actual needs of industrial customers to participate in the delivery and limit the continuous supply capacity of the egg factory, resulting in a limited scale of trading after listing, especially the non-main contract is relatively weak. In order to adapt to the industrial characteristics of "chickens and eggs are delivered every day", in March 2015, DCE revised the contract rules for the first time, and launched a daily selective delivery and car delivery system from the egg **1703 contract. Different from the one-time delivery method, where a contract has only one delivery date, under the daily delivery method, the seller customer can submit a delivery application from the first trading day of the delivery month to the last trading day, which breaks through the original time limit of a first-time delivery and increases the convenience of delivery. At the same time, on the basis of the existing standard warehouse receipt delivery, the delivery of the car plate is added, so that the seller can complete the physical delivery after loading the goods into the buyer's car board at the delivery place designated by the exchange, which is not only more suitable for the characteristics of egg spot, but also reduces the cost of inspection, storage loss and other expenses, and greatly reduces the delivery cost.
In June 2020, DCE made the second revision of the egg ** contract rules, introducing a series of measures including naked egg pricing, adjusting packaging requirements, improving delivery quality standards, optimizing the daily selection delivery process, optimizing the delivery process and the warehouse delivery quality dispute handling process, etc., to promote the egg ** delivery process to be closer to the spot ** Xi and ** to better reflect the spot supply and demand relationship.
In order to make it more convenient for industrial customers in different regions, different channels and different packaging types to participate in the delivery, the pricing method of egg delivery will be adjusted to the pricing of naked eggs, which no longer includes packaging, and the transaction margin and delivery default are also calculated based on naked eggs. In terms of delivery quality standards, the egg weight grade, Huff value requirements and sensory indicators have been optimized to make them more in line with spot ** Xi habits, such as using the net weight of 360 eggs in a whole box instead of the weight of a single egg as the egg size judgment standard.
In January 2022, DCE continued to optimize the relevant rules for the delivery and settlement of eggs, so as to further improve delivery efficiency, tap delivery potential, reduce food safety risks, and better serve the high-quality development of the egg industry, including optimizing the settlement process of warehouse receipts in the factory warehouse, allowing eligible warehouses to carry out delivery of vehicle plates, shortening the delivery and delivery time from the delivery date to the warehouse or delivery site, optimizing the order of multiple customers picking up goods at the same warehouse at the same time, and strengthening food safety management.
It is worth mentioning that after a series of contract rules optimization, eggs** have become the first continuously active contract variety of DCE, and also the first variety of "monthly delivery" in China, with the delivery volume increasing from 38 hands in 2014 to 1,251 hands in 2022, and a record of 583 hands delivered in a single month in February 2021.
The exchange's adjustment of contract rules is a full consideration of market development, risk management and the actual needs of market participants. Several major contract rule adjustments have promoted the play of market functions, improved market liquidity, and attracted more enterprises to participate in hedging transactions. Han Taixin said.
In the process of industrialization of the egg industry, with the continuous expansion of the scale of enterprises, the dependence on eggs will become greater and larger, and the participation of the industry will be further improved. When talking about the prospects for the future application of eggs by physical enterprises, Liang Chengqiang said.