International Impact On China’s Agriculture Product Price Fluctuation Influence Mechanism Analysis

In recent years, research about the price of agricultural products attracted scholars’ widespread interest, more and more researchers have begun to focus on the agricultural product price fluctuation.As everyone knows, since the reform and opening up, as China’s market economy continues to open up, the price of domestic agriculture products are influenced from international inpact and appeared fluctuant phenomenon, directly affect the consumer price level, make the national economic stability caused serious effect.Therefore the establishment of a stable market of agricultural products has become one of the important goals to perfect market economy.Our country is recognized as a major agricultural countries, with the development of science and technology, China’s agricultural production appeared a good momentum of growth, especially the growth of wheat yield.Related to agricultural research report points out that our country wheat self-sufficiency rate is above99%, so our wheat basically need not rely on imports.However, as one of main grain crop,soybean dependence is relatively high, China have a large number of imports from abroad every year, therefore the international soybean price fluctuations will lead directly to the domestic soybean price fluctuations, which led to the domestic agricultural product price fluctuation.Therefore, as the world agricultural market liberalization continues to advance, various countries agricultural policies continuous relaxation, the international price of agricultural products and the international factors will make more important influence on the price of domestic agriculture products.This paper mainly have two aspects:firstly, in the agricultural product market factors, we select several major trading partners of China, they are the main exports of agricultural products in china.Through integration analysis about trade countries and China agricultural product market, we found that different countries exsit different degree of integration because of their own countries tariffs and trade barriers of agricultural policies.the empirical study found that China and the United States does not exist the cointegration relationship,the same as agricultural product market does not exist long-run equilibrium relationship.China and Brazil produce market exists cointegration relationship.there exists asymmetric cointegration relationship between China and Argentina, canada and indicate that agricultural product price can not be fully effective transfer.with each country agriculture policy, imperfect competition, it bring about produce price asymmetry.To sum up, the major trading partners and our country’s agricultural products market exsit a good integrated relationship, but due to the limits of government policy, market prices can not be fully effective transmission, so various countries must strengthen agricultural market liberalization, gradually opened up agricultural barriers and other restrictions, furtherly perfect the agricultural product market.Secondly, in recent years, as China’s market economy gradually liberalized, agriculture market is not only impacted by its own market,effective exchange rate of RMB, the international oil price and the international prices of agricultural products have a certain impact on the market.In this paper,we use the VECM model to study these factors impects on domestic agricultural product price.The results showed that:in the short term, RMB real effective exchange rate and the price of domestic agriculture products have the opposite direction, the international agricultural product price and the price of domestic agriculture products have the same direction, the international oil price have limited impact on the price of domestic agriculture products.However, through the short-term Granger causality test, in the short term, some combination is the Granger causality on domestic agricultural products price fluctuation.For these factors on the price fluctuation of agricultural products contribution, through variance decomposition, find that RMB real effective exchange rate have the contribution rate of the biggest, followed by the international price of agricultural products, international oil prices contributed to almost nothing.Therefore,effective exchange rate of RMB and international agricultural product price are the main influencing factors,stable RMB exchange rate have important significance to reduce the price fluctuation of agricultural products.