The Effectiveness Of New Products In Agricultural Futures Market

Thanks to the establishment of China’s Futures Industry Association, the guidance of the Tenth Five-Year Plan, the support of the government and the endeavor of industrial practitioners, China’s agricultural futures market has witnessed rapid development and stable growth since the dawn of the 21 st century. As China deepens its market reform, the prices of agricultural products become more volatile, especially after 2009, and the industrial practitioners are demanding more risk-evading tools. Meanwhile, to meet the growing demand of China’s agricultural futures market, a variety of new agricultural futures products have been devised in recent years, such as rapeseed futures products and egg futures products.As of the end of 2013, a total of 19 agricultural futures products are traded in the futures exchange, accounting for almost half of all the traded commodity futures. In addition, the agricultural futures market has seen more participation of industrial players, which account for about forty percent of the total agricultural futures holders. A healthy and effective futures market plays a pivotal role in increasing the income of farmers, promoting industrialization of agriculture, and accelerating the strategic adjustment of agriculture. It is of great importance to study the effectiveness of new agricultural futures products.Against this background, this paper, by targeting the rapeseed futures, which is commonly traded in the futures market and whose data can be easily accessed, and making full use of the related economic theories, conducts an analysis on the effectiveness of new agricultural futures products in the aim of objectively evaluating the agricultural futures market. The paper consists of the following seven chapters:The first chapter presents the background, purpose, significance, and methods of the research involved in the paper, illustrates the innovation of the paper, and introduces the literatures relating to agricultural futures at home and abroad.The second chapter discusses the related theories of new agricultural futures products,including the concepts, features and functions of agricultural futures market and the definition of the efficiency of the futures market.The third chapter depicts the status of China’s futures market, including its origin,development, and role in influencing the agriculture.The fourth chapter evaluates the efficiency of China’s futures market from such perspectives as the related evaluation index and methods, and the source and processing of the data.The fifth chapter conducts an empirical analysis of the effectiveness of new agricultural futures products, covering the information efficiency, pricing efficiency and price discovery efficiency.The sixth chapter analyzes the volatility of the prices of new agricultural futures products in terms of information efficiency in the futures market of agricultural products.The seventh chapter makes conclusions and policy recommendations. The paper concludes that pricing efficiency of new agricultural futures products leaves much to be desired, with unsatisfactory information efficiency, price discovery efficiency and price volatility efficiency. The paper proposes to improve the situation through the improvement of the market system of new agricultural futures products, the cultivation of new market players,the perfection of management mechanism, and the smoothness of information dissemination.