A Research On China Foodstuffs Price Fluctuation

Foodstuffs are the basic of people’s life and the price of them is the foundation of the price of all the other things. Foodstuffs price has always been the hot spot of people’s concern from all walks of life. With the gradual liberalization of China’s grain market, and in the common role of the law of supply-demand and external shock factors, the fluctuation of grain prices has been more and more frequent. The volatility in foodstuffs prices not only affects the interests of producers and the welfare of consumers, but also casues great negative impact on the sustainad and healthy development of National economy. Taking the wheat as an example, this paper tends to establish a system framework of the fluctuation and impacts on the wheat price so as to provide the scientific basis for grasping the characteristics of fluctuation, influencing factors, the ripple effect and the implement of regulating policy with the help of the theory and research methods of modern economics and starting from the supply and demand in the wheat market and the environment of our policy and system. This paper tends to provide some referential basis for the scientific establishment of China’s grain price control policy through the above analysis.The specific research contents, method and main conclusions of this paper are as follows:Chapter III of this paper defines scientifically the fluctuation cycle and analyzes the factors of the price of wheat in China by time-trend remove method, Analysis shows that:(1) The price of wheat in China has experienced seven cyclical fluctuations since1978, wheat prices shows obvious features of cyclical fluctuations, but there is no a certain regularity price fluctuation cycle.(2) To analyze the reasons for the price of wheat was found cyclical changes in supply and demand changes in the price of wheat is still the the dominant factor in production costs and other factors on the price of wheat has brought a considerable degree of impact, while state regulatory policies on the volatility of wheat prices there is a certain inhibition; fluctuations in market prices of wheat through the inter-regional characteristics analysis showed that:China’s provinces and sales areas of wheat price fluctuations in the western provinces of the coefficient of variation was significantly higher than the coefficient of variation of price fluctuations areas. This will to some extent, sales areas and western provinces of wheat production in the wheat market, the weak nature of species may be enlarged, the price volatility than larger areas.The fourth chapter theoretically analyzes the causes and the impact mechanism of wheat price fluctuation from the aspects of supply and demand and external shocks. Analysis shows that:(1) The main causes of the fluctuation of wheat market price are coming from the factors of supply and demand, the macroeconomic situation and policy changes, etc. The combined effect of multiple factors led to the changes of supply and demand in wheat market, making wheat market price in the state of fluctuation;(2) The scattered, small-scale cropping patterns, coupled with the no perfect industrial processing and circulation system and the increasing cost of production affect the fundamental stability in the wheat supply market. The demand of wheat in China has rigid stability because of consumption habits which expands the effect of fluctuation.Chapter IV empirically analyzes the influence of supply and demand factors and external shocks on wheat market price by the construction of price factor model and the use of supply and demand theory and market equilibrium methods on the basis of the analysis in the fourth chapter. Analysis shows that:(1) Price and other cost factors of production are the main driving force to promote the market price of wheat;(2) Farmers’ market expectation is also a factor of price fluctuation;(3) The price fluctuation of competing crops has significantly effect on the market price of wheat;(4) The effect of demanding factors including income levels and population growth rate is not significant;(5) The reform of circulation system which reflects the regulation and control policy of national food market has a significant impact on the price of wheat;(6) The impact of natural disasters on the wheat market prices is significant.Chapter VI mainly analyzes the transmission effect of market price fluctuation of wheat from the perspectives of both regional markets in China and domestic and international markets. In terms of the transmission effect of domestic market:(1) The wheat markets in China between regions show cointegration relationship, and the price fluctuation price changes in a region can lead to price changes in another area in the long term.(2) The result of the error correction model shows that the long-term equilibrium relationship between the wheat regional markets restricts the short-term price fluctuation. Such an error correction mechanism departure can decrease the deviation between the prices and make the price adjustment to equilibrium. Besides adjustment ability in the production areas could be generally greater than the ability in the sales areas.(3) The results of Granger causality test show that the guiding effect of market price in the wheat-growing areas on the market price in the sales areas is significant, however the guiding effect of market price in the sales areas on the market price in wheat-growing areas is weak.Chapter VII analyzes the impact of price fluctuation on the production and supply of wheat, starting from the characteristics of production price reaction of the wheat by establishing the price of production response model according to the theory of supply of agricultural products and assumption of farmers’ rational decision-making. The results show that:(1) The reflection of wheat production to the price fluctuation is insensitive in short order, while it is flexible of the supply of wheat and there is reflection of wheat production to the price fluctuation in long order;(2) The seeded areas in short order show strong rigidity because farmers planting decisions are influenced by the fixed elements.Chapter VIII puts forward some policy measures to promote the health operation and stable development of the wheat market on the basis of the above research conclusions from the aspects of completing price control system, strengthening agricultural infrastructure and R&D and promotion, standarizing the agricultural market, ensuring the...