Dec. 22 (NBD) -- China launched its own apple, which has nothing to do with iPhones. Zhengzhou Commodity Exchange listed Fuji Apple futures on Friday.

With regard to the reason why Fuji Apple was chosen as the futures object, the China Securities Regulatory Commission (CSRC) once commented that the launch of apple futures will facilitate and improve an open and transparent pricing of apples so as to provide a guiding price for market participants.

Futures starts trading at 7,800 yuan (1,185 U.S. dollars) a metric ton

The apple futures becomes available after a long-time study and debate.

Earlier this month, the CSRC approved the apple future trading at the Zhengzhou Commodity Exchange, saying that the apple future trading is an important move to implement the country's strategy of shaking off poverty, as well as to support the economic development of poor areas and serve the real economy.

According to the CSRC, the apple futures can serve as a hedge tool to lower price risks, stabilizing enterprises' production and operation.

The apple contracts will be for delivery in May, July, October, November and December and trading will run from 9 a.m. to 11:30 a.m. and 1:30 p.m. to 3 p.m. local time, according to the announcement by the Zhengzhou Commodity Exchange.

They’ll start trading at 7,800 yuan (1,185 U.S. dollars) a metric ton. The minimum trading deposit stands at 7 percent of the contract value.

Changjiang Futures, a futures trading service company, noted that regular and cyclic patterns are observed in apple prices. From December to June of the next year, the apple price generally goes up, and after June till November, the price mainly goes down.

Citic Futures agreed, saying that price difference of apple futures contract brought by the seasonal variation create opportunities for possible calendar arbitrage.

Chinese listed companies along the apple industrial chain will, more or less, involve in the apple future trading.

Lontrue Co., Ltd, a fruit producer whose key products are apples and raisins, was designated by the Zhengzhou Commodity Exchange as the warehouse to deliver the futures contracts. 

China is the world's largest apple producer and consumer

Apple, orange, pear, grape and banana are the five major fruit in China, with apple topping the list in terms of output.

The country is the largest apple producer and consumer across the globe. In 2016, the apple plant area in China stood at 30 million mu with a total yield of 43.88 million tonnes, accounting for 57 percent of the world's total.

Top apple producing provinces are Shaanxi, Shangdong, Henan, Shanxi, Hebei and Gansu, altogether taking up 84 percent of the country's total output.

China has fresh apple storage capacity of 10 million tonnes, or about 25 percent of production.

Apple futures is the first fruit futures in China, yet not the only futures that closely related to people's everyday life.

In 2013, egg futures became available at the Dalian Commodity Exchange.

Currently, China's commodity futures covers agricultural products, non-ferrous metals, construction materials, chemical engineering, energy and other sectors.

This is the first time at home and aboard to launch the fresh fruit futures. The arrival of apple futures at a Chinese exchange is beneficial for enhancing China's decision-making power of apple prices.

Email: gaohan@nbd.com.cn