In recent years,the world geopolitical landscape has been undergoing profound changes along with the rhetoric of unilateralism,terrorism and trade protectionism.For example,the 9/11 attacks in 2001,the Iraq war in 2003,the Islamic State escalation in 2014,the terrorist attacks in Paris in 2015,the crisis on the Korean Peninsula in 2017,the trade dispute between China and the United States in 2019 and the new crown The outbreak of the epidemic and the Russia-Ukraine conflict in early2022 have all caused negative impacts on the global economy and financial markets,driving the global economic landscape to evolve in an increasingly complex direction.Therefore,as one of the most complex political factors affecting the macroeconomy,geopolitical risks are receiving increasing attention.And as the financialization of agricultural products gradually deepens,China’s agricultural futures market has become more closely linked to the international futures market.Specifically: on the one hand,China is the largest importer of agricultural products,for example,in 2021,China’s corn imports increased by 152.20%year-on-year,reaching 28.35 million tons,accounting for 17.23% of the total imports of agricultural commodities in that year,of which corn imports from Ukraine amounted to 7.32 million tons,accounting for about 29.02% of total corn imports;on the other hand,Russia and Ukraine are the main exporters of agricultural products in Europe,such as wheat,corn and sunflower oil exports from Ukraine in 2021 accounted for 12%,15% and 50% of the global market,while wheat,barley and sunflower oil exports from Russia in the same year accounted for 20.16%,26.16%and 18.08%.In addition to Ukraine is China’s main source of corn imports,the National Bureau of Statistics of Ukraine published data show that in 2021 Ukraine’s corn production of 42 million tons,of which 70-85% and for export,and exports to China accounted for 16% of its own production,accounting for 20% of its own exports.In summary,Russia and Ukraine occupy an important position in China’s agricultural import and export trade that cannot be ignored.However,after the outbreak of the Russia-Ukraine conflict,due to the damage of arable land,port blockade,policy restrictions,etc.,the agricultural exports of Russia and Ukraine have fallen precipitously,which has aggravated the severe situation of the international agricultural market and brought certain risks to China’s agricultural market.In this context,it is important to pay close attention to the impact of the Russia-Ukraine conflict on China’s agricultural market,in order to adjust the import structure of agricultural products and prevent the input risk brought by the changes of international agricultural prices.Based on the above,this paper extracts the agricultural futures composite index and global geopolitical risk index from September 2011 to July 2022,which are used as proxy variables for China’s agricultural futures market and global geopolitical risk events,respectively,and empirically investigates the time-varying impact of geopolitical risk on China’s agricultural prices through a TVP-VAR model with stochastic volatility.The paper also subdivides geopolitical risk into two sub-indicators,geopolitical threat and geopolitical action,and further analyzes the shock effects of both when geopolitical risk occurs.The results of the study show that(1)three different geopolitical risk events,such as the Islamic State escalation in 2014,the Korean Peninsula crisis in 2017 and the Russia-Ukraine conflict in 2022,all have a shock effect on China’s agricultural futures market,but with the adjustment of the market prices will return to the normal trend;(2)the degree of shock of geopolitical risk on China’s agricultural futures futures prices varies at different lags,and overall it decreases with the lag period;(3)When different geopolitical risks occur,the impact effects of geopolitical threats and geopolitical actions on China’s agricultural products are basically in the same direction;however,after the event,the impact effects caused by geopolitical actions will gradually decrease,while the impact effects caused by geopolitical threats will first increase briefly and then decrease;(4)Overall,when geopolitical risks occur,the impact effects of geopolitical actions on China’s agricultural futures prices are closer to the overall level.shock effect is closer to the overall level;(5)when considering different lags,the degree of shock of geopolitical threats on China’s agricultural futures prices decreases with the increase in the number of lags.Since China’s corn imports account for a relatively large share of agricultural imports and Ukraine is a major corn exporter in the international market,the article also concludes with an analysis of the impact of the Russia-Ukraine conflict on China’s corn futures prices in February 2022 as an example to justify these conclusions.The results of the case study show that the impact of the Russian-Ukrainian conflict on our corn futures prices follows roughly the same trend as its impact on our agricultural market.In order to reduce the impact of geopolitical risks on China’s agricultural futures prices,this paper puts forward the following suggestions for reference only: firstly,China should strengthen trade cooperation with the countries and regions related to the "Belt and Road" and promote the diversified development of agricultural products import channels;secondly,we should devote ourselves to consolidating the foundation of China’s food security,formulate a flexible Secondly,we should devote ourselves to strengthening the foundation of China’s food security,formulating flexible agricultural product safety policies,deepening supply-side reform,and improving the competitiveness of domestic agricultural products in the market;finally,we should make efforts to improve and perfect the laws and regulations of the agricultural futures market,promote the development of innovative agricultural futures products,increase the trading activity of investors in the agricultural futures market,and strive to improve the pricing power of China’s agricultural futures in the international market. |