Research And Design Of Hedging In Domestic White Sugar Industry

The future market and the spot market are independent and correlative at the same time.Therefore,for all threshold,the research of spot market plays an essential role in the development of the future market.However,during the whole process,the majority of the participants of the spot market seldom make it successful for supporting the future market in order to meet the goal of business entities.As the White sugar industry is developing,future market realised that it is difficult to beat other companies through only production,processing and sale.If we need to break the inherent rules of the industry,we need to run the two markets together,which means that the trading platform of the future market needs to assist the company's current system of supply and selling.To be more detailed,if we are facing good market condition,through the future,the companies are able to target the lower purchase cost and the higher sale price.So,the stock is sufficient and it makes profit for the companies.In contrast,if we are experiencing the collapse of the market,companies' products can be hedging and reduce the risk of the decreasing of the products price.This paper has made qualitative analysis of the influencing factors,influencing mechanism and influencing degree of sugar futures price from the perspective of sugar processing enterprises;pointed out the judgment evidence for the future trend of sugar price,the focus problems that each stage needs to pay attention to,industry data as well as other price influencing factors which may revise original judgment logic.At the same time,it has made quantitative analysis of the comparative relationship between each market price and domestic sugar futures prices by selecting domestic sugar spot,international sugar futures and American CRB commodity futures index through empirical test methods of Johansen co-integration test,vector error correction model and Grainger causality test.It has been found that that stable co-integration relationship exists between each market and domestic sugar futures market in long term and short term.In addition,America sugar 11 indexes and CRB index price have one-way guiding function for domestic sugar futures price index and domestic sugar futures index price has one-way guiding function for domestic sugar spot price.Based on the judgment of the short medium and long term of white sugar futures prices trend,this article from three aspects to explain how the sugar processing enterprises operate inventory management,hedging and arbitrage with the help of the futures market.The description is from arbitrage principle and the significance of the hedge to planning and decision-making,then to the design of the scheme,finally summarizes the plan implement process and result.In this way we directly know the thinking of the sugar processing enterprises in Implementation process and the details enterprises need to pay attention.