Overcoming the threat of the new coronavirus and returning to in-person events, the commodity futures industry in Japan moved mainly around rice and electricity futures transactions in 2024. Most of the events and the study workshops held in 2024 were related to the both products. In the competent authorities, the Ministry of Agriculture, Forestry and Fisheries (MAFF) seemed to have high expectations for rice futures and the Ministry of Economy, Trade and Industry (METI) seemed to have high expectations for electricity futures. There are now only two commodity futures exchanges, Tokyo Commodity Exchange (TOCOM) and Dojima Exchange (ODEX), and with the launch of the integrated exchange in 2019, the listed products such as precious metals were transferred to Osaka Exchange. Also, since the building of TOCOM was demolished in 2023, the symbolic presence of commodity futures in Tokyo has all disappeared including Tokyo Grain Exchange (TGE) which was dissolved in 2013.

 The Minister of MAFF at the time, Tetsushi Sakamoto concluded that it was appropriate to approve the application for permanent listing of rice futures because it complied with the approval standards. The approval standards in commodity futures markets are determined based on the following two items: Ⅰ. Sufficient trading volume is expected. Ⅱ. Necessary and appropriate to facilitate production and distribution.
The product applied this time is the index calculated average price of staple food rice based on “Relative spot trading prices and quantities of rice” that contain 118 local brands published monthly by MAFF, and by using it as an indicator for rice futures trading, it provides a means of diversifying management risk to rice farmers and dealers.
Regarding applying of permanent listing of rice futures by ODEX in July 2021, 90 percent of trading volume of 4 products－“Tokyo Rice (National wide paddy-grown brown rice) ”, “Koshihikari Rice from Niigata Pref.”,“Akita-Komachi Rice from Akita Pref.” and “Hitomebore Rice from Miyagi Pref.” － with high volume performance during trial listing period at that time was concentrated in Koshihikari Rice from Niigata Pref., and it was determined that participation of rice farmers and dealers wasn’t increasing, so it was disapproved the following August.

The Bank is 10th trader who acquired the qualification for trustees in electricity futures transaction and became able to treat orders from domestic and overseas investors from entrustment to clearing regarding energy futures transactions on TOCOM. The relationship between MUFJ and commodity futures trading dates back to 1990 when the name of the bank was The Mitsubishi Bank. In October 1990, The Mitsubishi Bank teamed up with Diamond Lease to set, and sold the first commodity fund as a city bank. Sales of the fund was in US dollars and its sales amount was 64 million dollars, so it was a large class at that time. At the beginning, the funds were mainly principal-guaranteed type, but active funds have also started to be established in 1996, and as a result, the total number of funds reached 14, and city banks’ entry into commodity fund business had a major impact.
What is affected more than the set amounts was sometimes pointed out that it was a change in sales methods. Until then, door-to-door sales to large institutional investors were the main focus, however, after that, major banks such as The Mitsubishi Bank sold their commodity funds through their respective nationwide branch networks. In other words, instead of door-to-door sales, a new style of over-the-counter sales was introduced. If such a sales method is introduced in the commodity futures industry in Japan, a new world may open up for the industry.

Until then, the trading periods for electricity futures were up to 24 months in advance on monthly bases. New transactions with weekly trading are four types whose trading periods are up to 5 weeks in advance covering from Saturday to Friday of the following week. They correspond to the business practices of the electric power industry and meet short-term hedging needs. The target areas of the transactions with weekly trading are 2 types, the eastern area and the western area in Japan, similar to the transactions with monthly trading. In each of the eastern area and the western area, “Baseload futures”－unit: 24 hours worth of electricity－and “Daily load futures”― unit: worth of electricity from 8:00 to 20:00―are set. Their trading units are based on 100 kwh × (number of hours in the delivery period) similar to the transactions with monthly trading, so baseload futures with weekly trading is 16,800 kwh and daily load futures with weekly trading (5 days) is 6,000 kwh. Their tick price unit is 0.01 yen per kwh.

The number of participants at the summit which was first held in 2019 was only about 20 people. After that, due to the coronavirus pandemic, the in-person event was canceled. EEX and TOCOM first co-hosted the event in 2023 and about 300 people gathered for it at that time. The number of participants in the event in 2024 was 550 people, almost doubled as much as in 2023－another 200 people participated through the website. The event in 2024 was a great success and showed high expectations and interest in electricity futures trading.

Mr. Takashi Ishizaki, the president of Tokyo Commodity Exchange (TOCOM)－a subsidiary of Japan Exchange Group (JPX), gave a message at the beginning at the University of Tokyo. And then, regarding rice spot market, Mr. Shunsuke Orikasa, the president of Future Rice Market which opened in October 2023 lectured, and regarding rice futures market, Mr. Yoshiaki Watanabe, the president emeritus of Niigata Agro-Food University, who is the former administrative vice-minister of Ministry of Agriculture, Forestry and Fisheries (MAFF) and was the president of Tokyo Grain Exchange (TGE) when it started rice futures transaction as trial listing in August 2011 lectured.

（Futures Tribune・issued December 3, 2024 ・no.3328）