Apple futures help fruit industry enterprises solve financin

  • Jan, 09th 2019

The Apple Futures Variety of Zhengzhou Commodity Exchange is the world's first fresh fruit futures product. Since its listing on December 22, 2017, all parties in the market have given high attention.

On December 21, 2018, the Shenglong Fruit Industry Company of Baishui County, Shaanxi Province, on the scene, nearly 100 fruit farmers queued to pay compensation - Baishui County Apple Futures, which was undertaken by Guoyuan Futures and China Property Insurance, "Insurance + The Futures pilot project will pay for it. According to relevant persons from the Zhengzhou Commodity Exchange, the pilot project covered 3,000 tons of apples, involving more than 200 fruit farmers. Eventually, the actual price did not reach the insurance price, resulting in a payment of 750,000 yuan, and the average household paid more than 3,000 yuan.

China is the world's largest producer of apples, and more than 50% of global apple production comes from China. However, in recent years, the price fluctuation of apples has increased, which has a great impact on the operating income of industrial enterprises and fruit farmers. In addition, the main apple producing areas are highly coincident with the key poverty-stricken areas in China, and apple cultivation is an important source of income for local farmers.

In August 2018, Zhengshang Institute expanded the “insurance + futures” pilot to Apple varieties. A total of 10 projects of 10 futures companies were supported by Zhengshang, with a support fund of about 10 million yuan. At present, three pilot projects have been completed, with a total of more than 2.5 million yuan in compensation, involving the main apple producing areas such as Ning County, Heshui County, and Baishui County of Shaanxi Province.

Not only that, under the promotion of the extension county government of Shaanxi Province, ICBC and six futures companies innovatively launched Apple's “bank + insurance + futures” model, the project underwrites the apple spot of 15,000 tons, covering the planting area. 10,000 mu, involving 739 households, the relevant financial institutions also plan to provide follow-up financing support and financial services for the project.

Apple Futures also helps solve the financing problems of fruit companies. In October and November each year, Apple concentrated on the tree, and Apple companies faced a large number of Apple acquisitions during this period. Most Apple enterprises belong to private enterprises. The lack of self-owned funds and high credit costs are real problems, and the demand for funds is urgent.

"Agricultural enterprises have been difficult to raise funds, and apples that can be stored and stored cannot be mortgaged. It is difficult to obtain bank loans." Peng Xiaoqiang, general manager of Shaanxi Huasheng Fruit Industry, said that Apple Futures is listed and enterprises are financing through warehouse receipts. Ways to get liquidity.

[123The warehouse receipt financing refers to the loan business of the short-term working capital that the client applies for the normal production and operation turnover to the financial institution with its own standard warehouse receipts registered by the futures exchange as the pledge.

Experts pointed out that futures companies have a professional research team and research team in the docking industry, enterprises, and futures markets. They are also using the market for reasonable hedging while doing warehouse receipt financing, in specific products or regions. Have strong risk identification and self-protection ability, so in the warehouse receipt financing business, the advantages are more obvious, and can develop targeted products.

For example, CITIC China Securities Capital actively carried out the warehouse receipt financing pledge business for the needs of Apple enterprises. From October to November 2018, in the south of Baishui, Xianyang, Huanhua, Pingliang and Jingning, four apple companies made Apple's standard warehouse receipt financing business, with a value of more than 14 million yuan, a pledge rate of 80%, and a pledge period of 4 months to 5 months. Throughout the process, Apple companies have received short-term financing, which is more flexible than banks, shorter in cycle, simple in process, and lower in cost.

Chen Huaping, chairman of Zhengshang Institute, said that on the basis of stable and orderly operation of Apple Futures and relevant conditions, new derivative products such as Apple Options will be listed in time to further enhance the service capabilities of Apple's production and operation entities.