What Is the Dojima Rice Trade?
The Dojima Rice Trade used to be as soon as a commodity futures trade that specialize in rice. Based totally in 1697 in Osaka, Japan, the Dojima Rice Trade is considered the world’s first commodity futures trade.
Although the Dojima Rice Trade used to be as soon as dissolved in 1939, it is succeeded in the course of the Osaka Dojima Commodity Trade (ODE), which remains vigorous to nowadays.
Key Takeaways
- The Dojima Rice Trade is a well known commodities trade that existed in Osaka, Japan, between 1697 and 1939.
- It used to be as soon as the world’s first organized commodities futures trade, first of all that specialize in rice.
- At the moment, the legacy of the Dojima Rice Trade continues via successor exchanges purchasing and promoting in rice along with a lot of other commodities.
How the Dojima Rice Trade Works
During the past due 17th century, rice carried out the most important serve as throughout the Japanese monetary gadget. In this day and age, samurai and other officials received their salaries in rice quite than in cash, and various other group of workers were expected to pay their taxes in rice. This led to early innovations throughout the Japanese banking device, with banks and de-facto banking institutions allowing their consumers to deposit rice and withdraw cash.
At the an identical time, rice used to be as soon as and remains a staple of the Japanese nutrition, rising an abundance of name for for the commodity. In this atmosphere, Japanese investors began organizing futures contracts through which buyers would possibly gain rice ahead of time at predetermined prices, eliminating the risk of surprising worth will build up and letting them secure valuable supplies of rice ahead of time. The ones contracts allowed rice growers to obtain upper protection for the sale of their harvest, locking in prices at acceptable levels.
The jail knowledge putting in the ones contracts were made and saved at a central location, on the north monetary establishment of Osaka’s Dojima river. This central location, at which investors and traders would incessantly congregate, become known as the Dojima Rice Trade. As the world’s first organized commodities futures trade, its impact remains with us in recent times via stylish exchanges such since the ODE or the Chicago Mercantile Trade (CME).
Precise Global Example of the Dojima Rice Trade
The legacy of the Dojima Rice Trade is alive and well in Japan. During the 1950s, new commodities exchanges were established in Japan right through the passage of the 1950 Commodity Trade Law. This ended within the introduction of the Osaka Grain Trade in 1952, along with the Kansai Agricultural Commodities Trade in 1993.
The Kansai Agricultural Commodities Trade trade then went via a sequence of mergers, the most recent being the Osaka Dojima Commodity Trade, formed in 2013. Rice continues to be actively traded on the trade in recent times, alongside soybeans, coffee beans, fish products, and other commodities.
