Analysis Of Exchange Rate Conduction Effect Of Chinese Soybean Import Prices

On July21,2005, our country launched a new round of RMB exchange rate formation mechanism reform. China gradually formed a more flexible RMB exchange rate formation mechanism. Soybean is the main trade products in our country. The import trade scale has increased year by year. By the end of2012,the number of import has reached58.38million tons Soybean industry chain is the longest in agricultural commodities. It is directly related to China’s national economy and people’s livelihood. Soybean industry in China over80%dependent on foreign soybeans. Therefore the price of import soybean have a significant influence on soybean industry. Transmission refers to a country’s currency exchange rate fluctuations impact on the price of country’s import and export trade, the price level. So the effect of soybean import prices of exchange rate transmission has the significant practical significance. The United States is our major soybean importer. In2012Chinese buy more than26.01million tones soybeans from USA. American food dealers into the soybean industry in China since1996.They has very big impact on our soybeans industry. So this paper selected the soybean trade between China and the United States as the example on exchange rate transmission effect research.Based on the background described above. This paper focus on the RMB exchange rate pass-through to Chinese import price of soybeans. It based on the purchasing power parity (PPP) theory、the theory of PTM、Menu costs theory. Through the analysis of the Chinese soybean industry’s realistic problem. Use the establishment of measurement model to analysis the effect of RMB exchange rate to the price of import soybeans. The main conclusions are as follows:The RMB exchange rate fluctuations on soybean import prices there is no complete. The RMB exchange rate changes every wave unit will drive the price of imports0.84units. Based on the perspective of asymmetric, the RMB exchange rate appreciation in soybean import price is greater than the influence of the devaluation of RMB exchange rate. The former has passed the test of significance. But both for price conduction coefficient is very small. In0.029when the exchange rate appreciation in the value of0.014. Sharp fluctuations of RMB exchange rate effect is superior to the effect of small fluctuations. The former has passed the test of significance. But the conduction effect is still very low. Fluctuated when conduction coefficient is0.023.This paper argues that China is highly dependent on imports of soybeans in the United States、American food dealer master soybeans purchasing power、Imports of soybeans trade pricing、the Menu adjustment costs of factory are the reason for RMB exchange rate fluctuations on imported soybeans’ prices don’t conduction. Based on the results, the author think our country’s exchange rate reform should be smoothly. At the same time, we should use the differentiation competition strategy. The government should stepping up efforts to support the industry.