The Tokyo Grain Exchange and Osaka-based Kansai Commodities Exchange marked the first anniversary of test-listing rice futures contracts Wednesday, with the trading volume remaining low due to limited market participation.
If rice futures are to be formally listed, an expansion of the market is necessary once the two-year test period is over.
On the Tokyo exchange, the average daily trading volume between Aug. 8, 2011, and the end of last month stood at 366 contracts, well below its initial goal of 5,000 contracts. On the Osaka market, the average daily trading volume was 741 in the same period.
Market participants have been limited to rice traders and commodity futures firms because agricultural cooperatives across the nation have refused to join.
In addition, “rice futures have failed to gain popularity partly due to the lack of foreign markets that serve as reference for pricing, unlike corn and soybean futures,” an official at a major commodity futures firm said.
Some wholesale rice traders, however, have purchased rice through the futures market following a shortage of the staple in 2011 after the start of the Fukushima nuclear crisis.
Due to fears of radioactive contamination, just 2,853 tons of rice grown in Fukushima Prefecture were delivered through the futures market — a figure that accounted for about 3.5 percent of annual shipments from the prefecture by agricultural cooperatives.
Rice futures trading will be taken over by the Kansai exchange after the ailing TGE is dissolved next year.