VOLATILITY DEFENCE
New JSE futures contract to protect mutton farmers
The JSE’s Chris Sturgess says there is interest in and a need for the instrument to help protect against volatility
The JSE has beefed up its offering of livestock futures contracts with the addition of a lamb carcass contract. The instrument, which is less than a week old, has seen no action yet, but JSE director of commodity derivatives Chris Sturgess said there was interest and a need for the product. "We haven’t seen an actual trade go through, but we have chatted to a number of people who have expressed an interest," said Sturgess. "When we rolled out the beef carcass contract about a year-and-a-half ago, we were approached by stakeholders in the lamb sector who asked us to find an instrument to help protect against volatility. With the beef contract already in place, this was an easy product to roll out and we had the risk appetite to try it out," he said. Sturgess said the contract would allow farmers and abattoirs to protect themselves against risk created from movements in the price of mutton. As the most expensive meat consumed in SA, lamb is sensitive to consumer sentiment. This direct...
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