Research On The Application Of Futures In Xinjiang Cotton Market Risk Aversion

As an important strategic material,cotton plays an important role in many fields,such as textile and paper making and so on.Xinjiang's unique natural climatic conditions are very suitable for cotton growth.The cotton industry has become the most competitive advantage agriculture industry and have a great significance to promote the development of rural economy and increase the income of farmers in Xinjiang.However,India and other major cotton producing countries have been expanding,and the rapid growth of cotton production has resulted in the oversupply of cotton in the international cotton market,and cotton prices have shown a downward trend in recent years;Although China cotton market have unceasing deepening,but the Chinese cotton market is still not perfect at present,the efficiency of resource allocation is still to be improved,especially the reform of the cotton target price policy,the lack of portfolio management means Chinese cotton production and management subjects directly exposed to the cotton market risk.As the main cotton producing areas in China,the resulting in an extremely negative impact on Xinjiang cotton production,circulation and other aspects and threat to the sustained increase of the healthy development of Xinjiang cotton and farmers under the market risk;The Xinjiang cotton market risk aversion measures is very limited and can't play a role in safeguarding the healthy development of Xinjiang cotton,so how to avoid the risk of the cotton market has become an important problem facing the development of cotton in Xinjiang.The practice of European and American countries have proved that avoid the role of futures on cotton market risk is significant,which has become the main tool to avoid market risks by offered the cotton price guidance and value added.However,the development of cotton futures in Xinjiang is obviously lagging behind the development of the stock market,and the role of avoiding risks has not yet been fully exploited.Therefore,guided by the relevant theories and based on sufficient research data and Futures and spot transaction data,Explored the current situation and existing problems of the cotton spot market and futures market in Xinjiang,Application of risk management theory of Xinjiang cotton market risk status and risk aversion measures are insufficient,Empirical research on the realization mechanism of the function and analysis the function of hedging to avoid the market risk of the success of Xinjiang cotton futures price discovery.Research show that the market risk of Xinjiang cotton is grim,but the control measures have limited effect;The function of futures price discovery indirectly realizes cotton market risk avoidance by predicting cotton price and guiding cotton production;The futures hedging function is to hedge the cotton market risk by calculating the optimal hedging ratio.because the application of risk avoidance in Xinjiang cotton market is very inadequate,So we should improve the quality of cotton in Xinjiang,the establishment of new cotton circulation system,promote the delivery of library construction,increase publicity and support of cotton futures in Xinjiang futures market to promote the application of risk aversion in cotton.