Dojima Rice Exchange

What Is the Dojima Rice Exchange?

The Dojima Rice Exchange was a commodity futures exchange gaining practical experience in rice. Established in 1697 in Osaka, Japan, the Dojima Rice Exchange is viewed as the world's most memorable commodity futures exchange.

Albeit the Dojima Rice Exchange was broken down in 1939, it is prevailed by the Osaka Dojima Commodity Exchange (ODE), which stays active right up to the present day.

How the Dojima Rice Exchange Works

During the late seventeenth century, rice assumed a vital part in the Japanese economy. Around then, samurai and different authorities received their salaries in rice as opposed to in cash, and numerous different workers were expected to pay their taxes in rice. This prompted early innovations in the Japanese banking system, with banks and true banking institutions permitting their customers to deposit rice and pull out cash.

Simultaneously, rice was and stays a staple of the Japanese eating routine, spurring an overflow of interest for the commodity. In this environment, Japanese shippers started coordinating futures contracts in which purchasers could purchase rice ahead of time at foreordained prices, dispensing with the risk of sudden price increments and permitting them to secure significant supplies of rice ahead of time. These contracts permitted rice producers to get greater security for the sale of their harvest, securing in prices at acceptable levels.

The legal records laying out these contracts were made and kept at a central location, on the north bank of Osaka's Dojima river. This central location, at which shippers and traders would consistently gather, became known as the Dojima Rice Exchange. As the world's previously organized commodities futures exchange, its influence stays with us today through modern exchanges like the ODE or the Chicago Mercantile Exchange (CME).

Real World Example of the Dojima Rice Exchange

The legacy of the Dojima Rice Exchange is fit as a fiddle in Japan. During the 1950s, new commodities exchanges were laid out in Japan through the entry of the 1950 Commodity Exchange Law. This prompted the creation of the Osaka Grain Exchange in 1952, as well as the Kansai Agricultural Commodities Exchange in 1993.

The Kansai Agricultural Commodities exchange then, at that point, went through a series of mergers, the latest being the Osaka Dojima Commodity Exchange, framed in 2013. Rice keeps on being actively traded on the exchange today, alongside soybeans, coffee beans, fish products, and different commodities.

Features

• The Dojima Rice Exchange is a popular commodities exchange that existed in Osaka, Japan, somewhere in the range of 1697 and 1939.
• Today, the legacy of the Dojima Rice Exchange go on through replacement exchanges trading in rice as well as several different commodities.
• It was the world's previously organized commodities futures exchange, initially work in rice.