CHINA'S first futures exchange celebrates its fifth anniversary next week, planning to launch wheat futures in a bid to recoup lost ground in the race among exchanges to expand. China Zhengzhou Commodity Exchange, which opened under the name of Zhengzhou Grain Wholesale Market on October 12, 1990, has fallen behind the more aggressive exchanges which have opted for fast-track expansion. Its turnover has fallen sharply since May after a clampdown by central authorities on green bean futures, which accounted for 90 per cent of trading volume. The exchange is finalising a blueprint to become the country's main exchange for white wheat futures, which now attract lukewarm interest. Even on the best of days, daily turnover of the wheat futures amounts to only several thousand lots, each lot representing 10 tonnes. The exchange hopes to bring daily turnover to 50,000 lots by early next year. China Zhengzhou is one of 15 approved exchanges. Xiao Yongcheng, an official with the exchange's research and development unit: 'We, in Henan, are a big producer of white wheat and the scope for expanding futures trade in this product is wide.' China produces 90 million tonnes of white wheat a year and imports 10 million tonnes, with Henan, Anhui, Shandong and Sichuan the four largest producers. Mr Xiao said the exchange would be calling on its 280 members to interest investors and hedgers in the futures. 'We do not want to expand recklessly and then get into trouble,' he said. 'What we are looking for is steady expansion of the turnover.' There are about 10 products traded on the exchange, with green bean futures the most active despite the May clampdown. The daily turnover has been halved to about 150,000 lots compared with the huge volumes recorded in May. Mr Xiao said because there was sufficient supply of white wheat, there was little danger of excessive speculation and wild price swings in the futures on the grain. Analysts said while futures were seen as a hedging instrument by producers and end-users elsewhere, in China they were used mainly by speculators to earn quick, short-term gains. Because of excessive speculation, Beijing suspended futures trading in sugar, steel bars, coal and petroleum products in April last year. It later extended the suspension to trading in round-grain rice, soyabean oil, rapeseed oil and red wheat. The biggest setback was the suspension on May 18 of treasury bond futures, after three brokerages tried to rig prices in February. Last week, fear of another scandal prompted the Shanghai Commodity Exchange to act quickly to rein in plywood futures speculation. With widespread speculation a feature of the futures industry, the watchdog China Securities Regulatory Commission (CSRC) these days does not hesitate to step in and intervene. Observers said the CSRC and the central government might be forced to rationalise the exchanges again. One futures analyst said: 'Too many exchanges pursue a course of reckless expansion to expand volume and income. 'I think if they are not careful, they will force the hand of the CSRC.' Authorities cut the number of exchanges from 40 to 15 in April last year and there have been rumours that the number would be reduced to about five.