Study On China’s Wheat Market Price Fluctuations And Its Control

After entering WTO,China’s agriculture development face more internal and external factors.The wheat price rose112%in2007because of the dry weather. The increasing ofinternational agricultural produce integration, the develop of biological energy and financialcrisis in2008make the wheat price fluctuation frequently.As the2rd crops, wheat marketprice fluctuation would influence people’s living and nation’s safety. The major objective ofthis paper is objectively to evaluate China’s wheat market price fluctuation, study the variouselements and influence theoretically and empirically, try to find out the main control factors,at the same time, provide suggestions for policies that both curb China’s wheat market pricefluctuations remarkably and stable wheat market price.On this goal, this paper mainly research the following aspects. First, describe the wheatmarket price fluctuations objectively in1985to2009using Hodrick-Prescott filter andGrowth Factor Method. The whole price shows the rising trend in1985-2009and it’sfluctuation presents periodic and non-symmetry. The price fluctuation cycle can be dividedinto1985-1989,1989-1995,1995-2001,2001-2004and2004-2009five cycles. As to thewheat market price fluctuation’s time feature,, we found that wheat market price waveamplitude decreases year after year. Second, this paper respectively analyze the supply,demand, food policy, macroeconomic and international market’s influence to China wheatmarket price both theoretically and empirically. Wheat market price fluctuation is not singlefactor influence, but the multiple factors. After correlation analysis, we get that the mostimportant factors are the wheat price policy, alternative food price and production cost.The second important influence factors include the former period wheat price, productiontechnology, macro-economy development. The next is consumer’s income level. Theweakest impact variables is wheat yield, policy on consuming and import and export.Through Granger test, we know that wheat per unit area yield and CPI index have Grangercausal relationship with wheat market price. The other factors all have long-term stablerelationship with wheat market price.Finally, we conclusion that the key factors affecting wheat price fluctuation includewheat price policy, production technology, macro-economic development, internationalmarket price and production costs. So the government should continue to implement theminimum purchase price policy, further implement grain subsidy policy on agricultural purchase, seed and farm machinery. At the same time, ensuring farmland ’s quantity, raisingper unit area yield, improving the food reserve mechanism and using import and exportpolicy reasonably to keep demand and supply balance.