The Study On The Fluctuations Of Cotton Price In China Since 1978 And The Choice Of Market Risk-avoid Tools

The economy situation in China has greatly changed since the open and reform policy was enforced.China has come from the trap of deficient economy. At the same time the problem of cotton in China has been different from before,only the problem of increasing gross production,on the contrary,it is becoming more and more complicated.Cotton is a kind of special merchandise related with the national economy and the people's livelihood, and the fluctuation of its price will bring not only the great loss to the different partners in the market but also the latent menace to the national cotton stratagem. So it is of great importance to summarize and analyze the features and reasons of the fluctuation of cotton price in China, which will help us to construct and consummate the market risk-avoid system suitable for our country. So, based on much first-hand data and using historical research method, this paper analyze the problem of how to choose the suitable way to avoid the market risks in Chinese cotton market.In Part 1, this paper analyzed the fluctuation of cotton prices in China. Based on the review of the price data from 1978 to 2004, it analyzed the general features and the real reasons for the fluctuation of cotton price, meanwhile, its harmfulness was described.Part 2 analyzed the ways to avoid market risks. Firstly, this paper introduced the general concept of market risks and the relationship between the risks of cotton market and the risk of price. Secondly, it illuminated the common tools to avoid market risks in cotton market and proved that the futures is of great importance to the cotton market based on the modern economics theories and applications. Finally, it showed some problems that limit the Chinese cotton futures to exert its abilities of avoiding market risks.Building on the Part 1 and Part 2,Part 3 gave some advice on how to construct and consummate the market risk-avoid mechanism of cotton futures in China. Based on the analyses of the former chapters and some helpful experiences of developed countries (mainly from the USA), this paper gave some advice on how to construct the market risk-avoid system of cotton futures and how to exert the market risk-avoid abilities of cotton futures. Meanwhile, some concise analyses about how to consummate the market risk-avoid system were expounded.Part 4 is the conclusion and suggestion.