China, where the world’s four biggest agricultural contracts are traded, will raise costs to buy and sell farm-product and metals futures as part of a government effort to limit speculation and tame inflation.
The Dalian Commodity Exchange said today it will scrap a measure that lets some investors pay half the normal fees for contracts bought and sold on the same day and will cease all other discounts as of Jan. 1. The Zhengzhou Commodity Exchange and Shanghai Futures Exchange said they will extend fees now levied on some contracts to other products.
The government has pledged to use price controls and may raise interest rates a second time this year to slow inflation that rose last month to a two-year high and to curb food costs that jumped 10.1 percent in October. Chicago-based CME Group Inc. and other U.S. and European commodity exchanges also are charging more to trade some raw materials after prices jumped.
“Raising fees to be active on the exchange is a predictable move to try to calm down speculative investment,” said Gary Mead, an analyst at VM Group in London. “But high futures prices reflect both speculative investment and fundamental supply-demand factors.” (more)
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