October 5: The Chicago Mercantile Exchange (CME) inaugurated trading on a new cheddar cheese futures contract that is expected to help buyers and sellers better manage price volatility. Cheese futures contract trading got under way while cheese options were to begin trading Monday morning. The futures contracts, sized at 18,182 kilos (40,000 pounds) in 18-kilo (40-pound) Blocks of cheddar cheese, are cash-settled to the US Department of Agriculture (USDA) weekly cheddar cheese price survey."The new cheese contract will allow companies holding cheese to protect themselves from inventory devaluation. Likewise, cheese buyers can assure themselves of desirable cheese costs many months in advance," said Denis Wyssbrod, President of Dairy State Brands. The CME has recently emerged as a key center for dairy products risk management, setting up a full dairy complex in anticipation of greater price volatility due to the removal of all government price supports for dairy products in the year 2000.Hutchison talks to North KoreaHong Kong conglomerate Hutchison Whampoa is in talks with North Korea on a telecommunications deal which could see the firm pump up to US$500 million into the isolated Stalinist state, a report said. Under the deal, Hutchison Telecommunications International would install a digital phone system providing 400,000 lines and a mobile network with a capacity of 20,000 lines, the South China Morning Post said, citing unidentified sources. Hutchison would be granted a 20 year franchise to operate the services and would retain up to 85 per cent of revenue under the plan, it added. Senior Hutchison executives ended three days of talks with North Korean officials Wednesday, it said, adding they declined to comment when contacted in Beijing.DKB, Itochu in property insuranceJapan's Dai-Ichi Kangyo Bank Ltd. (DKB) and Itochu Corp. will establish a property insurance joint venture this month, a major business daily said Saturday. The tie-up between the two companies will mark the first time a bank and a trading house have jointly entered the insurance sector, the Nihon Keizai Shimbun reported. Japan's largest trading house will have an 80 per cent stake in the venture, Cosmos Brokers Japan, to be capitalised at 200 million yen ($1.65 million). DKB will hold a five per cent stake, the largest stake a bank is allowed to hold in a Japanese Financial firm, and the balance will be with several insurance broker ages, the report said.The new company, which will initially develop liability insurance for corporations, will start operations in November, with a plan to offer a consultant service for insurance product development in the future, it reported. The tie-up is aimed at establishing a strong presence in the insurance industry in a run-up to the `Tokyo Big Bang' Financial sector deregulation which will enable banks to sell insurance themselves by 2001, it reported.
