| Along with the development of global economy,palm oil attracts numerous industries and is widely used in food and chemistry industries with its unique nutrition and relatively low price.China imports a hundred percent of its palm oil and it is the second largest palm oil importing country and the third largest palm oil consumer in the world.Palm oil is a significant vegetable oil resourse for China and China is a pivotal power in the international trade of palm oil.In order to stabilize the price of palm oil and to cut loss for Chinese palm oil trade companies in the international trade,and also to strive for the international pricing right of palm oil,China launched its first palm oil futures contract on October 29,2007.But there still exists some problems such as price volatility,price inversion and so on.In conclusion,the empirical analysis of palm oil futures market is necessary.On the basis of empirical research,the following conclusions are reached:The dominant contract and recent-month contract of palm oil are both have a certain ability of price discovery.But,relatively speaking,the ability of price discovery of dominant contract is obviously better than the recent-month contrract The dominant contract involves a large volume and a large number of participants,so it has more extensive information than other contracts.Moreover,the relationship between dominant contract futures price and spot price are more stable.Thus the palm oil trade companies should choose the dominant contract when use futures market to hedge and control risk.In the end,with the example of Zhejiang Provincial Light&Textile Industry Supplying&Marketing CO.,LTD,this paper researchs how a palm oil trade company use the price discovery function of palm oil futures market to hedge and control risk.What's more,provide constructive suggestions to other palm oil trade companies through the case analysis,hoping to reduce the risk for palm oil companies in the import maket and sales market... |
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