The Futures Delivery System Of China Grain Research

With the economic functions of price discovery and risk transfer performed by the Chinese futures markets, especially by the agricultural futures markets, the physical delivery is playing more and more important roles in the safeguarding of the integrity of the futures markets and the correlation of the futures market with the cash markets. At the present stage of the futures development, the improvement of the delivery system for better performance of the functions of the futures markets is an importance issue to be addressed.This thesis takes the process of the futures delivery as the object of the research, analyzes and investigates the physical delivery system. Firstly the thesis introduces the connotation, status and functions of the futures delivery in the futures market, secondly, it makes comments on the three different viewpoints about the futures system, and then makes a deep research in the futures delivery systems concerned such as the designing of the grade of the listed commodity as well as the premium and discount, the selection of the delivery locations and the regulation on the designated delivery warehouses, as well as the management and circulation of the warehouse receipts.On the basis of the above-mentioned analysis, I try to make some constructive suggestions and recommendations on the improvement and innovation of the futures delivery to be taken by the Chinese futures market at the present stage as follows :Futures contracts must be designed properly, that is, customers should be placed at the most important place, hedgers and speculators should be treated equally and use of the futures contracts by speculators should be stressed.Physical delivery on the futures market is the investor's own choice. It should not be restricted nor encouraged.The grade of the listed commodity should be characterized with practice of the spot market, and substitutes should be discouraged to use for delivery. Whether or not allow the commodities of the previous crop years to be a substitute should be determined on the basis of the principles of spot market and the futures market.Designated futures warehouses should be located following different principles according the characteristics of each commodity. The futures warehouses for staple goods should be located In the area of consumption or the conduit for the passage of this product on to eventual consumption points. For the futures commodity with small supply, the locations of futures delivery warehouses should be in a pivotal place of the production area. The delivery places should be adjusted with the change of the circulation of the spots market. The number of the warehouses should be Increased with the expansion of market scale.Because of the characteristics of the futures delivery the avoidance of the risks arising from the futures delivery should be done with the development of the futures markets. I believe it should be an important way to reduce the futures physical delivery risks to develop the agricultural production vigorously and enhance the standardization of the physical markets.