Making full use of the function of pig futures will play a positive role in improving the formation mechanism of pig price, enhancing the risk management ability of market participants and promoting the development of pig industry. China Securities Regulatory Commission will urge Dalian Commodity Exchange to make solid preparations for the listing of live pig futures to ensure the stable delivery and operation of live pig futures, which is conducive to the upgrading of industrial structure. Under the guidance of forward prices based on market prices, low-cost production capacity will be withdrawn at an accelerated rate, while high-cost production capacity will be withdrawn cautiously, which is conducive to the upgrading of industrial structure.
At the same time, corporate profits are more predictable, and futures price discovery and risk aversion functions can be fully used for hedging or production rhythm adjustment, which has a significant positive impact on valuation. From the experience of the United States, it is still necessary to reduce costs, extend the whole industrial chain and span the whole cycle. After the introduction of pig futures in the United States, the fluctuation of pig slaughter and pig consumption gradually decreased, which played a certain role in stabilizing pig production, processing and consumption.
However, the price discovery function of pig futures is affected by the maturity of the industrial chain. China is still in the initial stage of large-scale development in the United States, and needs low cost, high efficiency, full-cycle high-speed expansion and full industrial chain expansion. The introduction of investment suggestions for pig futures will help the industry to iron out the cycle and improve the valuation. However, as far as China's current industry maturity is concerned, the company still needs to rely on reducing costs and extending the entire industrial chain to cross the cycle. We continue to strongly recommend taking the lead in preventing and controlling African swine fever, continuing to grow at a high speed and optimizing costs. The leader of closed industrialized agriculture is faced with the future development of settled agriculture in food.