China launches urea futures

China launched the trading of urea futures contracts at the Zhengzhou Commodity Exchange (ZCE) in Central China's Henan province Friday morning.

"The launch of the futures is expected to provide an open, transparent and effective risk management tool," said Zhao Zhengping, vice chairman of the China Securities Regulatory Commission.

Since 2009, the average annual fluctuation of the price of urea has been more than 20 percent, according to Li Shousheng, head of the China Petroleum and Chemical Industry Federation.

"Amid increasing market uncertainties, consumers, production enterprises and trade dealers are in urgent need of the urea futures to hedge against risks," Li said.

"The new urea futures is just our first step in serving the real economy. ZCE will continue to improve rules and regulations to meet the demand of the urea market," said Chen Huaping, chairman of the board of directors of ZCE.

China is one of the world's largest urea producers and consumers.