Research On The Fluctuation And Utilization Of International Grain Market

At present,China is facing new challenges on food security in the stage of industrialization and urbanization process.Grain demand is increasing rigidly,meanwhile grain production is facing strong binding constraints and uncertainty.The resource limitation and the contradiction between supply and demand determine that China must make full use of both the domestic and international markets to guarantee food security.In recent years,the international grain market fluctuated frequently.It's becoming an important question for the government and the community that whether it is safe to make use of international market.Therefore,it is of great practical significance to study the volatility of the international grain market and to study whether it is feasible for China to use the international market.This paper is divided into six parts as follows.Firstly,this paper analyzes the current situation and fluctuation of production,demand and trade of the international grain market.Further studies the balance of production and demand,then analyzes the trade and stock on the regulation of production and demand.Secondly,this paper analyzes the causes of international grain price and the changes of different factors after the National Energy Policy Act was introduced by USA in 2005.Thirdly,this paper studies the transmission of international food price fluctuation.The VAR-GARCH(1,1)-BEKK model is used to analyze the spillover effect of international price fluctuation among different varieties.Then,using cointegration test and VEC Model for the analysis of the impact of international grain prices on China's grain prices.Fourth,this paper studies the availability of the international grain market,including the availability of time,total amount and tradeable amout.Fifthly,using the impulse response function and variance decomposition analysis to analyze the 'Large Country Effect' of China's grain import trade.Sixly,this paper analyzes the market power of China in soybean import trade by using Pricing To Market Model,then analyzes the market power of main export country by using Residual Demand Elasticity Model.The main conclusions of this paper are as follows.(1)The world grain output,demand and trade volume show increasing trends.The production fluctuations are larger than the demand fluctuations,and the trade fluctuations become smaller.There is a balance between production and demand on the whole.The stock and trade flow play a regulatory role on balancing the production and demand.(2)International grain price volatility is cyclical and has fluctuated more intense in recent years.In addition to the traditional factors,international grain price fluctuations are affected by new factors such as international oil price,biomass energy development and speculations.Particularly,the development of biomass energy makes international food prices and oil prices correlate more closely.The impact of traditional factors and new factors on international grain price are both more intense.(3)There is a spillover effect on the international price volatility between different grain varieties.Cross-conduction between prices will exacerbate the impact of international prices on domestic prices.(4)There is a long-term stable equilibrium between international prices and domestic prices.Short-term fluctuations in international prices affect domestic prices.Despite the deepening of the opening up of China's grain market,the integration of domestic and international grain markets have been declining due to the introduction of a series of stable price support policies and subsidy policies.(5)From the perspective of the availability of the world market,China's use of the world's corn and soybean market is more secure while the use of the world rice market is risky.(6)China's rice and wheat imports don't exhibit "large country effect" while corn and soybeans imports exhibit "large country effect".For rice,wheat and corn,the international prices will prevent imports,so China can make appropriate use of the international market.(7)China's soybean trade does not have market power for imports,but the expansion of the import market prevents the exporting countries from gaining market power,which is beneficial to China's soybean imports.(8)China's corn imports have not formed a relatively stable market structure at present.With the intensification of supply-demand and domestic policy adjustments,China's corn imports will become normal.From the analysis of soybeans market power,China's corn import markets should be promoted more diversified in the future in order to reduce import risks.