Dalian Commodity Exchange (DCE), one of the three futures exchanges in China, yesterday said it would release details of the draft contract on palm oil futures later this month to expedite the introduction of the product.

DCE said the palm oil futures contracts are likely to start trading this year pending the approval of the China Securities Regulatory Commission. It will be the second commodity futures product introduced by DCE this year. Trading in LLDPE, a primary plastic raw material, began on the DCE on July 31.

"We are speeding up preparations for the debut of palm oil futures and the timetable has been moved up from the original plan," Wang Weiyun, director of research department of DCE, told China Daily.

Palm oil is a key ingredient of many processed food products, including instant noodles and biscuits. Demand for palm oil in China, a major importer, is growing rapidly as a result of the expansion of the country's food processing industry.

In 2006, China imported 5 million tons of palm oil, an increase of 17 percent from the year before.

Liu Ri, a manager of DCE, said: "With the domestic food industry growing rapidly, palm oil demand is expected to continue to rise in the coming years."

Palm oil has led the price surge in edible oil products this year. Statistics from the State Agricultural Department show the price of palm oil in the domestic market in the first six months of this year rose 50.4 percent to between 7,000 to 8,200 yuan per ton from the same period the year before.

Ma Xiaofei, an analyst specializing in agricultural commodities at China International (Shanghai) Futures Co, said the introduction of palm oil futures would help establish a comprehensive edible oil futures market also including soybean and rapeseed.

"Owing to its increasing size, the edible oil futures market in China will have a stronger influence in the global market," Ma said.