Johannesburg Stock Exchange lists sorghum derivatives contract

Johannesburg Stock Exchange lists sorghum derivatives contract

This past May, Johannesburg Stock Exchange (JSE) listed a sweet sorghum derivative contract complementing the exchange’s existing range of agricultural derivatives. The product is aimed at larger agricultural traders, financiers and end processors with a contract size of 100 metric tons.

South Africa produces around 200 000 tons of sweet sorghum annually.  “We listed this contract in response to demand from various market participants. Due to limited local production of sorghum, we expect this to be a niche product serving the bigger players in the market,” says Rod Gravelet-Blondin, Senior General Manager of Commodities at the JSE. In South Africa, sweet sorghum is primarily used as an animal feed in the dairy industry.

“The introduction of sweet sorghum futures and options contracts will give these market participants a facility that will assist them with price discovery and help them manage price risk. The contracts will also enable financing transactions as institutions are able to manage their price risk,” adds Gravelet-Blondin.