Support for WA-based wheat export futures contract
Posted
Commodities traders believe a new Western Australian based 'wheat export futures market' will create a more transparent and flexible pricing system.
The stock exchange will develop the futures contract to cater for the increase in demand in the newly deregulated wheat export market.
Plum Grove's Tony Smith has welcomed the move and believes WA will eventually become the benchmark for wheat pricing in South-East Asia.
Mr Smith says international markets, such as the Chicago Board of Trade, are also becoming less reliable price indicators for WA produced wheat.
"That basis risk is getting to a level where using those contracts can sometimes be too risky. So the fact that we're going to have a contract that's priced off of WA is a great step forward," he said.
