Research On The Influencing Factors Of Soybean Price Fluctuation In China

Soybean is one kind of international agricultural products used as oil crop and economic crop.The fluctuation of its price has great influence on farmers,wholesalers,soybean processing enterprises and related industry.With the development of China's economy and enhancement of people's life,domestic consumption demand and processing demand of soybean grow rapidly.At the same time,due to the comparative income of soybean planting declines,farmers lack the enthusiasm for planting.In recent years,China's soybean acreage has declined continuously.Besides,soybean farmers are reluctant to sell at lower price.For the reason above,the domestic soybean supply increases slowly,the gap between supply and demand increases year by year.With the continuous opening of the soybean market,a large number of imported soybeans pour into the domestic market,soybean imports increase year by year and soybean external dependence continues to improve.At present,more than 2/3 of domestic soybean demand relies on imports,which makes China's soybean market become more closely with the international soybean market.In addition,as the price spread of soybean at home and abroad is large and the price of imported soybeans is far lower than that of domestic soybean,domestic soybean is therefore hugely impacted by the international soybean market.Supply and demand factors in domestic and international soybean market and other factors in the macro economy make the domestic soybean price fluctuate more frequent and much larger,which has seriously affected the farmers' growing income and the production and development of domestic soybean industry.Under such background,it is necessary for us to analyze the possible influencing factors of soybean price according to price formation theory and take necessary measures to stabilize soybean market price and make it change within a reasonable range on the basis of conclusion.This may increase the comparative income of soybean planting,improve soybean farmers' enthusiasm for planting and thereby increase the supply of domestic soybean and weaken the dependence on imported soybeans.In addition,stability of soybean prices also helps to reduce the loss of soybean processing enterprises,feed industry and animal husbandry industry caused by the abnormal fluctuation of soybean price and promote the stable development of domestic soybean industry and other related industries.Firstly,this paper reviews the document about the forming mechanism and influencing factors of soybean price by domestic and foreign scholars and it also analyzes the theoretical basis of the formation and change of agricultural products price,such as the equilibrium price theory,cobweb model,market failure theory and the transmission effect of international price.Secondly,the supply and demand of China's soybean market and its price formation mechanism are analyzed.Various factors that may affect the price of soybean in China are studied by referring to the price formation and fluctuation theory and using the statistical data.These factors include:production cost,soybean supply and demand,prices,supply and demand of related merchandise(soybean oil,soybean meal,rapeseed,peanut and corn),international factors(international soybean prices,crude oil prices and the exchange rate),futures market,inflation and national policy(tariff policy,transgenic soybean policy,subsidies and purchasing policies).Thirdly,this paper selects domestic soybean spot price as the research object.Based on the year-on-year data between March,2003 and February,2015,this paper makes an empirical analysis on the factors affecting the price of soybean in China by using the factor-augmented vector autoregressive model.Specifically,extract the common factors from the variables that may affect soybean price,then establish VAR model with these common factors and make impulse response analysis and variance decomposition.The result shows that soybean prices in China are influenced by many factors.Production cost,the demand for soybeans,international soybean prices,soybean futures prices,prices of substitutes and complements of soybean,inflation and international energy prices have positive effect on soybean prices in China while domestic soybean production,inventory,world soybean production and exchange rate(direct quotation)have negative effect.These empirical analysis results are consistent with economic theories except that of exchange rate.According to the results of variance decomposition,the soybean price itself and domestic soybean yield can explain most of the variation,cost factors,international factors,factors of futures and related products also contribute a lot to the change of soybean prices.In general,soybean demand,domestic production,the price of soybean oil,futures market and international factors are the main factors that affect the domestic soybean prices.Finally,according to the above research results,this paper puts forward some advice about stabilizing the price of soybean in China and promoting the development of domestic soybean industry.