Research On Promoting The Development Of Shandong Cotton Industry By Futures Mechanism

Cotton is an important economic crop in Shandong province and a strategic material related to the national economy and people’s livelihood.With the increasing marketization of the cotton industry,the cotton price fluctuation in Shandong province becomes more and more serious,which causes cotton farmers and cotton-related enterprises to be always exposed to the price risk and extend to the downstream industrial chain.Futures is a product of the development of market economy to a certain extent,and its unique price discovery and hedging function play an important role in avoiding price risk,providing the basis for business decision and promoting the circulation of agricultural products.In this context,this paper takes the application status of futures mechanism in Shandong cotton industry as the research object,and puts forward reasonable suggestions for the problems existing in the operation of futures market in Shandong cotton industry,which have great significance for guaranteeing the healthy and orderly development of Shandong cotton industry.This paper firstly describes the development status of cotton in Shandong province,and points out the adverse effects of price frequent fluctuations on cotton-related enterprises and cotton farmers.It theoretically discusses the important role of cotton futures in promoting the development of cotton industry in Shandong province.Furthermore,this paper conclude that futures mechanism can give full play to its function of price discovery and hedging in Shandong cotton industry and guarantee the healthy development of Shandong cotton industry by econometric methods.Finally,combined with the current situation of Shandong cotton market,this paper puts forward reasonable suggestions to protect Shandong cotton industry by using futures mechanism.The Suggestions mainly include:(1)Accelerate the development of cotton cooperative organizations and encourage cotton farmers to participate in the cotton futures market(2)Promote the new order type of "farmers + enterprises + futures"(3)Introduce relevant policies to encourage cotton-related enterprises to participate in the futures market(4)Built shandong cotton market information system under the guidance of futures price(5)Strengthen supervision to ensure the compliance of cotton futures market.