Beijing would launch rice futures contracts on the Zhengzhou Commodity Exchange as early as this month to better regulate the price of Asia's major grain, the China Securities Journal reported yesterday. The exchange has completed technical preparations for the new contracts, and trading will debut once the China Securities Regulatory Commission approves, the newspaper said. The exchange spokesman could not be reached for comment. A source said the launch of rice contracts was in line with Beijing's plan to set up an efficient pricing mechanism for significant agricultural products. However, the drought hitting northern China, which threatens the country's cereal grain harvests, might delay the regulator's approval for trading, analysts said. The newspaper said the Zhengzhou exchange, one of the three futures bourses in China, hoped trading would debut no later than March. The exchange had tested the technical system in mock trading and it was ready to officially kick off the new contract, the report said. The trading of rice contracts would pave the way for more daily necessities to be listed on the futures market, analysts said. Currently, most commodities traded on futures markets are for industrial use. 'It is advisable to leverage on the futures market to boost the agriculture sector,' said Huang Lei, an analyst at Yongan Futures Brokerage. 'Futures trading offers the government a tool to find the reasonable price of rice.' A food price surge led to soaring inflation on the mainland in 2007. The government collects grain from farms at a price higher than the market price as an incentive for farmers to grow rice and wheat. The drought, described as a once-in-30-years phenomenon, would not wreak havoc on the country's agricultural sector if it did not spread to the south, analysts said. China's stockpile of grain is still sufficient thanks to ever-increasing harvests in past years. Beijing also plans to introduce pork contracts on the futures market, according to a guideline to boost agricultural development published by the State Council last week.