Research On Application Of The Cotton Futures In The Cotton Industry Of Xinjiang

Cotton is the most scale advantage of economic crops in Xinjiang, cotton industry which focused on cotton production is a mainstay of the development of economic in Xinjiang. In recent years, with the development of the market economy and the deepening of structural reform, the spot cotton market has been fully liberalized. For the absence of any effective means of trading, it is hard to transform Xinjiang's cotton resources advantages into reality economic advantages.The lag of cotton price information lead to production escaping from the market demand, and causing an imbalance between cotton supply and demand. It is too difficult for farmers to accurately grasp the changes between market supply and demand. The cotton enterprises are also trapped in a plight of "expensive to buy", as well. Cotton price violently motion greatly influenced the cotton supply and demand.June 1, 2004, the cotton futures came into the market in Zhengzhou Commodity Exchange bourse.Theoretically speaking, Futures markets which has two functions of hedging and price discovery can play an active role to guide farmers in the production and ensure the farmers'income. But in fact, Futures markets function in Xinjiang has not been fully played out. So, what are the factors leading to the Xinjiang cotton futures industry function is restricted and how to fully use it become the key to solving the problem.In this paper, criterion economics method and the demonstration economics method have been used to analysis. There are several angles which involved farmers, cotton enterprises, futures companies, the government, Agricultural Development Bank to carry out the thesis. Clarify the function that the exertive each of rightnesses corpus of the cotton futures market function would bring. The Eviews software is used to analyze the substantial circumstance of the cotton futures market function to bring into play. Research into why the cotton futures market functions failed to exert in Xinjiang and where the problem is. This text thinks that the impact of the factors that cotton futures market functions didn't work in addition to their own reasons is mainly because the spot market of Xinjiang and the futures market did not work well with. Farmers and cotton enterprises as the main parts of hedging scarcely involved in. It is recommended that government should guide actively and promote cotton growers and the enterprises to take part in the futures trading by administrative means, develop intermediary organizations actively, cooperatives, professional groups. Only fully play to the cotton futures market through the efforts of destination, can we effectively promote Xinjiang's cotton industry development.