Study On The Fluctuation And Transmission Relationship Of Cotton Futures And Spot Prices In China And America

China is a large country of cotton production and consumption.The output and consumption of cotton rank among the top in the world all year round.The cotton industry plays an important role in promoting China’s economic development.However,since the reform and opening up,with the continuous improvement of cotton market opening and the expansion of cotton foreign trade,the linkage of cotton prices at home and abroad has become stronger and stronger,and the fluctuation of cotton prices in China has become more and more frequent.The fluctuation of cotton price is directly related to the income of farmers and the production and operation activities of cotton textile processing enterprises.It also indirectly affects the price level of consumers’ purchase of clothing fabrics and other necessities of life.The reason why agricultural futures came into being is that it can avoid the risk of agricultural price fluctuation.However,China’s cotton futures started late and its development is not yet mature.Similarly,as a major cotton producer and exporter,the United States is the first country to apply futures to the field of agricultural products.After more than 150 years of development,the discovery function of cotton futures price has been very sound,which not only plays an important role in regulating and guiding the production and operation of American cotton spot market,but also becomes the"barometer" of international cotton market price.Today,the spot price of American cotton has a great influence on the international cotton price.Relying on its important position in the international cotton market and the price discovery function of ice cotton,the United States has become the pricing center of the world’s cotton.As the main source of China’s imported cotton,it is of great significance to study the fluctuation and transmission relationship between China and the United States cotton futures and spot prices.This paper takes the cotton futures and spot market prices of China and the United States as the research object.Firstly,the X-12 Seasonal Adjustment model is used to eliminate the seasonal factors and irregular variables in the cotton futures and spot prices of China and the United States.It is found that the cotton futures and spot prices of China and the United States are affected by seasonal factors and irregular factors,but there are differences in the characteristics of seasonal and irregular fluctuations between the two countries.Secondly,the HP filter method is used to decompose their long-term trend and circular fluctuation trend.It is found that the long-term trend of cotton futures and spot price fluctuation in China and the United States shows an upward trend as a whole,which has the characteristics of periodic fluctuation,but its periodic characteristics are different.Finally,based on the analysis of the transmission mechanism of China US cotton futures and spot prices,this paper makes an in-depth empirical study on the transmission relationship between China US cotton futures and spot prices by constructing VAR model,vector error correction(vece)model,impulse response function and other models.The results show that there is a cointegration relationship between China and the United States cotton futures and spot markets,that is,the price transmission relationship.Compared with China’s cotton futures and spot market,the correction of American cotton futures and spot market is stronger,and the speed of information transmission is faster.Compared with the spot market,the futures market correction of China and the United States is stronger.Meanwhile,the price discovery function of American cotton futures market is stronger than that of China,and the impact of American cotton spot market price on Chinese cotton spot price is stronger.It shows that the American cotton market is dominant in the world.Based on the above research results,this paper puts forward some countermeasures and suggestions to improve China’s competitiveness in the international cotton market,improve the cotton market monitoring and risk prevention mechanism,and improve China’s cotton futures market.The innovation of this paper is to put the cotton futures market and spot market of China and the United States in the same framework,which can not only compare the price transmission relationship between China and the United States,but also study the price discovery function of China’s cotton futures market.