(Yicai Global) Feb. 2 -- China's first four peanut futures contracts rallied over 12 percent on their No. 1 day of trading as prices are expected to rise ahead of Chinese New Year.

The PK2110, the main contract which is scheduled to be delivered in October, surged by 12.3 percent to CNY10,504 (USD1,624) per ton on the Zhengzhou Commodity Exchange yesterday.

The PK2201 contract with January 2022 maturity rose by 13.3 percent, after hitting the daily limit-up intraday. Both of the contracts edged up by more than 2 percent this morning.

China is the world’s largest peanut producer, both in terms of planting area and output. Its total tally was 12.2 million tons in 2019, valued at about CNY91.1 billion (USD14.1 billion).

Prices of the financial instruments climbed yesterday because the initial price of CNY9,350 per ton is as much as 5 percent lower than the current oil mill entry prices, Bian Shuyang, agricultural product analyst at Nanhua Futures, told Yicai Global.

The market is now approaching the top of the long-term fluctuation range, said Shi Hengyu, chief oilseeds and grains analyst at Luzheng Futures.

There are still many uncertainties before new peanuts enter the market this year but prices are not likely to fall in the short-term as peanut byproducts and peanut oil are expected to be in high demand during Chinese New Year, said Shi.

The contracts involve a minimum lot of five tons and prices may fluctuate as much as 7 percent per day. Investors can trade the contract at 8 percent of the current trading value at the lowest.

Editor: Emmi Laine