The operator of the Tokyo Grain Exchange, the nation's second-largest commodity bourse, will seek its dissolution at a shareholders' meeting next March due to shrinking volumes.
Under the plan, corn, soybean, sugar and adzuki bean contracts will be transferred in February to the Tokyo Commodity Exchange, Japan's leading raw materials bourse, while the Kansai Commodities Exchange in Osaka will start handling rice futures, Tokyo Grain Exchange Inc. President Yoshiaki Watanabe told reporters after a board meeting.
The number of transactions started falling when the government introduced regulations in 2005 to tighten sales of risky financial assets to individual investors, and the bourse is currently losing about ¥40 million a month, according to estimates by Jitsuo Tatara, chairman of broker Yutaka Shoji Co.
In August, the bourse's rice futures rebounded for the first time in seven decades, but consumer fears about possibly contaminated rice amid the Fukushima nuclear calamity soon put a stop to that.
"It is very regrettable that the Tokyo Grain Exchange will disappear, ending its long history," Watanabe said. But, "we have to exit the business before losses expand" further.
Tokyo Grain Exchange logged an operating loss of ¥773.7 million in the year to March 31, with volume plunging 25 percent to 2.66 million lots. The bourse saw a record 26.5 million lots in the year that ended in March 2004 — a year before the stricter rules sent it into a tailspin.
The exchange trades various commodities, including gold, silver, platinum, rubber, gasoline, kerosene and crude oil. Last year, it accounted for 92 percent of the combined trade volume of Japan's three raw materials exchanges.
The number of domestic raw materials bourses dropped to three from seven in 2005, when the new rules took effect to better protect consumers from aggressive brokers.