RUYI Cotton Group Hedging Strategy Research

In recent years,Cotton prices fluctuate violently and Bring heavy pressure to the cotton spinning enterprises.How to avoid price fluctuations caused byoperational risk,Hedging by futures market is undoubtedly the best choice,This article from the reduce business risk, the pursuit of long-term stable profit point of view,Analysis of the cotton spinning enterprises are facing cost risk,Profoundly reveals the role of cotton hedging in the operation and management of textile enterprises.According to the present price of cotton inventory situation and the group has established a set of complete cottonhedging scheme.Firstly, the concept of hedging principle, type to do a simple introduction,discusses the related literature at home and abroad,and through the domestic and foreign cases demonstrates the mechanism and results of hedging combining theory and Practice.Then based on the production and operationprocess of cotton spinning enterprises,especially the risk facing the raw material procurementprocess in-depth analysis,explain why hedging can effectively reduce raw materialpurchasing risk,clear the cotton textile enterprises do hedging purpose.Then the elements of the development set of security strategies are described,and introduces the concept and effect of basis of the effect of hedging.Finally, the comprehensive consideration of various factors,tailored cotton hedging scheme for Shandong Ruyi group.In this paper, the end of a hedging role and significance of understanding make a summary,along with the market economy system gradually perfect and the capital market reform and development,Chinese futures market have 20 years of exploration found,the hedging function is becoming more and more important,play an increasingly important role in theprocess of economic development servicesand entity industry.I hope this paper to the relevant enterprises and futurehedging decision in the process of a certain reference value.