Yunnan menglian sugar project "two-way underwriting" to achieve a win-win situation

     Since 2016, zheng shang institute has selected white sugar as the key variety of the pilot project of "insurance + futures" for three consecutive years. After years of practice, the "two-way underwriting" mode has been gradually explored, which can provide price insurance services for sugar farmers and sugar mills at the same time, and gradually promote the coverage of the whole county, making an important contribution to the poverty alleviation work in pilot areas and the development of related industries.

      In 2018, in the futures, China Pacific property insurance co., LTD and essence of agricultural insurance co., LTD., under the cooperation of association in menglian county opened the white sugar futures "+" insurance "two-way underwriting" pilot, for the county 1367 sugar cane planting 12942 acres (6000 tons of sugar) cane fields provide price risk, as well as the only local sugar mill - Meng Lianchang abundant sugar provided 6000 tons of sugar prices fall protection.

     The pilot projects through the "two-way underwriting" model, specifically designed for sugar cane insurance prices, guaranteed for sugar mill prices "project insurance scheme, well adapted to the local industrial risk characteristics and requirements, the final project pilot 1367 poor households for sugar cane provides a total of more than 720000 yuan to pay, boost the local poverty engines work effectively.

     It is worth noting that the pilot project also realized effective hedging of the risk exposure of otc options through the combination of floor options and futures contracts. In addition, the pilot project also actively explored the use of the basis trade model. In the project, through cooperation with sugar enterprises, a new mode of "order + insurance + futures" was actively explored, which opened a new idea for solving the problem that the traditional "insurance + futures" mode could not eliminate the basis risk.

Forward from: futures daily