Tokyo Grain to set details of rice contract end

TOKYO Feb 15 (Reuters) - Tokyo Grain Exchange said on Tuesday it will decide details of rice futures contracts by the end of the month and then apply to relevant authorities for listing approval as soon as possible.

Tokyo Grain Exchange's president, Yoshiaki Watanabe, told a regular news conference the exchange has set up a working group to decide on the structure of rice futures contracts and aims to reach a conclusion by the end of February.

The exchange, which handles trade in futures for corn, soybeans, red beans, coffee and raw sugar, wants to apply for the listing of rice futures as soon as a conclusion is reached on the product's structure, Watanabe said.

An exchange spokesman said details to be firmed up include which brand of domestic rice should be the benchmark, delivery methods, trading units, margins, and other technicalities.

If the listing of rice futures is approved they would be the first in Japan in about 70 years. Some traders expect such a new listing to help spur trading volumes.

Struggling TGE decided at a board meeting in December, after months of debate, to transfer its farm product futures to the Tokyo Commodity Exchange, Japan's largest commodity exchange, which lists gold, rubber and other industrial commodity futures. [ID:nTOE6BK066]

The presidents of both exchanges told reporters on Tuesday they are still discussing the best way to ensure liquidity and trading are not hampered by the transfer.

Both exchanges have agreed to a collective transfer of open interest for farm futures contracts from Tokyo Grain Exchange, with the grain exchange aiming to reach a formal agreement by spring. [ID:nTOE70H049]

The grain exchange integrated its trading platform with TOCOM's upgraded system in January, aiming to bolster trading.

Japan's commodities exchanges are all losing money amid plunging volumes, having failed to lure a wide range of players.

TOCOM accounts for nearly 90 percent of total trading volume among Japan's three commodities exchanges, with TGE accounting for less than 10 percent.

(Source: http://af.reuters.com/article/energyOilNews/idAFTOE71E05Y20110215)