The JSE is broadening its agricultural commodities trading platform by allowing buyers of beef to trade in carcasses in order to manage price expectations.

This comes as SA grapples with drought, raising fears about the prices of agricultural commodities escalating.

The launch of the beef carcass futures contract should guide buyers such as restaurant owners and retailers to manage future price shifts.

"We have now added beef to the commodities derivatives market previously known as Safex," JSE director of commodities Chris Sturgess said on Thursday.

The launch of the beef carcass futures contract adds to an existing pool of agricultural commodities traded on the JSE including white and yellow maize, soya beans, sunflower seeds and sorghum.

"The reason for this was ultimately a demand from the beef sector for instruments to manage price shifts," Mr Sturgess said.

Asked to explain what this meant for an ordinary restaurant owner or retailer, Mr Sturgess said: "If you operate a restaurant and you are buying beef, what you want to do is to protect yourself from the increase in beef prices.

"(For example) if a restaurant owner puts in a beef carcass futures contract now and gets a kilogramme at R40, if the price goes up to R45/kg ... the restaurant owner will get R45/kg to go and buy from an abattoir," Mr Sturgess said.

This means the restaurant owner would have saved about R5/kg by buying into a beef carcass futures contract now.

However, if beef prices fell below R40, the restaurant owner would have overpaid.

Mr Sturgess said the JSE had so far traded 104 contracts at 1,000kg since the launch last month. The contract’s popularity had increased this year and about 200,000 stakes had already been traded, he said.

"The value of the trades so far has been about R4m since January," Mr Sturgess said.

Asked if this would result in an increase in beef prices, Mr Sturgess said: "It is a transparent platform that will help the market to understand what beef prices could potentially be in the coming months."

The expiry dates for the trading of the contracts are March, June, September and December.