china declares war on derivatives, page-3

The majority of the world's commodity producers have in the past used derivatives markets to 'hedge' and lock in price certainty. This has been largely possible thanks to the availability of third party credit to manage the margin call liabilities that often arise. Now those third parties (usually banks) no longer wish to bear the margin risk of derivatives positions global commodity producers are moving away from derivatives. Certainly true in the agriculture sector. Cash contracts the preferred method of locking away price risk ... this is not news to commodity producers.