The Analysis Of China’s Agricultural Products Price Fluctuations And International Finance Factors

Prices of agricultural products are a key component in the pricing structure, which are closely related to the crucial economic indexes such CPI etc., people’s living standards, the sustainable development of agriculture and the operation of the nation’s macro-economy. Mutual interaction of the agricultural products’ markets between domestic and abroad has been on the rise, and prices of domestic agricultural products(DAP) has been affected by more and more impacts since the reform and opening up and joining WTO. The inflation caused by the sharp fluctuations in prices of agricultural products has deeply influenced people’s lives, the development of agriculture and national stability. Therefore, it makes great sense that we stabilize the prices of agricultural products by means of clarifying the fluctuation and trends and defining the market pathways of agricultural products for both home and abroad.This paper has firstly combed the fluctuating causes and characteristics of DAP together with the relative documents and the theoretical basis of the international pathways, which are from scholars both home and abroad. Secondly, a preliminary understanding about the fluctuation of DAP has been reached through carrying out descriptive statistical analysis of the data concerned. Furthermore, the paper has also analyzed the correlation between DAP and IAP. Thirdly, not only the fluctuation ratio of agricultural products’ prices has been determined by using coefficient of variation and unconditional standard deviation but also comparison between horizontal and longitudinal has been conducted, thereafter exploring the fluctuation and changes of agricultural products in the recent ten years. Besides, the prediction has been made for the fluctuation trend by applying GARCH. Finally, based on the theory of price transmission mechanism, the paper has elaborated the direct and indirect transmission effects that the fluctuations of IAP have on those of DAP. And the empirical analysis has been also conducted by using VAR in combination with monthly time series data from 2003 to 2014.The conclusion is drawn as follow: 1. Most of agricultural products have low price fluctuations. Over the past ten years, 51.52% of the price fluctuations of agricultural products are fairly low, and the most drastic ones of agricultural products take up around 20%, which mainly focuses on vegetables; 2. Price fluctuations haven’t been on a rise. Compared two phases, it’s found that about 91% of the price fluctuations of agricultural products haven’t gone up with an exception of a handful of products; 3. Trends of price fluctuations differ in different kinds of food, which shows an apparent clustering phenomenon. Fluctuations will gradually decrease for grains, fish, meat and eggs, vegetables and fruit, while those of oil products will be ever sharper; 4.The indirect transmission pathways, such as exchange, futures and trade, have greater effect than direct ones. The former can explain 20% of the fluctuations, while the latter can explain only 10%. A summary has been made at the end of the paper, which has put forward several suggestions on stabilizing the price fluctuations of agricultural products as well.