How The Commodity Derivatives Business Of Futures Company To Service The Real Economy

Nowadays, Chinese commodity futures market have been achievingrapid development. In the market, new varieties and business emergecontinuously. The ability of futures companies to serve the real economyand the real enterprises is strengthened constantly. At the same time, alarge number of real enterprises begin to pay close attention tocommodity futures, desire to understand the role and function of thefutures, eager to insulate themselves from the commodity-price risk byhedging. So, as the professional services firms in the futures market,futures companies should undertake the responsibility.However, as a whole, Chinese derivatives market is still notdeveloped. As an important part of the derivatives market, thedevelopment orientation and successful experience of commodity futuresmarket is worthy of reference for the derivatives market. The realeconomy and the real enterprises will get better services, only when the overall derivatives market get rapid progress.In the first chapter, by introducing general situation of Chinesederivatives and commodity futures market, the paper highlight Chinesecommodity futures’ important status and role in the derivatives market.And it analyzes the important multi-level function of commodity futuresbusiness from the respect of the microeconomic entity enterprise, mediumand macro economy (focus on commodity pricing).In the second chapter, the paper discusses the different demand ofthe different types of enterprises for hedging, under the differentconditions. And it Points out that corporate entities involved incommodity futures market hedging is common in the three problems,namely,(1) understanding of hedging business does not reach thedesignated position;(2) agencies set unreasonable and rules®ulationsis not sound;(3) the lack of specific operation ability. On the basis, itanalyzes the various risks from the three aspects of the problems in theimplementation of hedging operations.In the third chapter, on the basis of futures companies’ businessfunctions, the paper analyzes the way of futures companies to servecorporate entities involved in commodity futures market hedging,analyzing some relevant cases.In the forth chapter, the paper points out that entity enterprise’sgrowing demand for futures need better service provided by futures companies. Finally, on this basis, it expresses the good wishes of thedevelopment of Chinese futures and derivatives market.