Research On Relationship Between Price Of China’s White Sugar Futures Market And Spot Market

Futures markets through its own price discovery and risk transfer functions,effectively stable the market price. Development of China’s agricultural futures market isnot perfect, in this context, studies of sugar futures market and the spot market pricerelationships, analyzing the futures market price discovery function for the developmentand improvement of the agricultural market system provides a theoretical basis, hasimportant practical significance.In this paper, firstly we make theoretical analysis and discussion about the futuresmarket and spot market. then build the methods of analysis between China’s sugar futuresmarket and spot market price. Secondly, this article describes the meaning of the futuresmarket price discovery function and implementation process. The paper uses the theory ofholding costs and warehousing theory discusses the mechanism of the futures market pricediscovery function, while the article describes the futures market price discoveryfunction-specific trading mechanism. Again, it describes the development status of China’ssugar futures market. Sugar futures for the study, with correlation analysis, ADF unit roottest method, vector auto regression model, Granger causality test method empiricalanalysis to study the dynamic relationship between sugar futures and spot market. Finally,from the point of view of the market system, the paper proposes to further improve andperfect the futures market and spot market, give full play to the policies and measures ofthe futures market price function.This paper found: Sugar futures prices and spot prices are highly correlated, sugarfutures prices affect spot prices, but spot prices on the futures price guide is weak. Sugarfutures prices could reflect the initial sugar spot price movements future trends.On this basis, we propose to accelerate the development of white sugar futures marketsystem, and improve the spot market. Mainly from the following aspects: Futures prices onthe spot market and futures market guidance effectiveness needs to be further strengthenedand enhanced. Need to expand the scale of sugar futures; accelerate the pace of new futureslisted; strengthen coordination and dynamic adjustment of the three-tier regulatory system;Addition of further optimization of sugar futures market, futures market not only dependson the completeness of its own building, but also relies on the spot market systemdevelopment and improvement, the need to strengthen the spot market facilities.