Study On Effect Between Chinese Cotton Trade And It's International Price

This article is a sub-topic research result of my teacher national funded project "Taking active part in the international pricing power ",and has done a systematical research between Chinese cotton trade and international cotton price.The cotton is the longest industrial chain crop of the big field crop, only second to foodstuff, holds important status in national economy. There are 25 areas in china's 31 areas planting cotton. Cotton production not only involves 50,000,000 farmer families (more than 200,000,000 agricultural populations) in the cotton production area benefit, it also connected the benefit of textile workers and the development of textile department. After china's entering WTO, china has imported more and more cotton. In 2003, china has imported 2 million tons of cotton, accounts for 28% of the domestic cotton consumption quantity and 26% of world trade. In 2004, china has imported 1.83 million tons of cotton, accounts for 25.1% of the domestic cotton consumption quantity and 21.6% of world trade. The average cotton import price is 0.7555$/pound, raised up to 24.6%.As the import quantity of cotton becomes big and the high percentage in the world trade, china should have the right to price. But due to the concentrated import in the high price, many cotton company has lower benefit,even deficit. It's a good lesson for all the Chinese cotton company.Basing above background, this article has done qualitative and quantitative analysis between the china cotton trade and international cotton price. In the qualitative analysis, using big trade country and small trade country model analyses the effect of china's trade to the international cotton price. In the quantitative analysis, using the Co-integration model and Granger cause test to define whether the series of china's import cotton quantity, export quantity, net import quantity and total trade quantity is a constant series, and analysis the Granger Cause of import quantity and international price, the Granger Cause of the export quantity and international price.According to the research, china's import is a big import country that is china's import quantity could affect the international cotton price. China's import quantity has long term Co-integral relation with international cotton price CotlookA index. When CotlookA index deviates from the Co-integral relation, the adjusting time would be short. As to the export, china is a small export country that is china's export quantity couldn't affect international cotton price and has to accept international price. china's export quantity also has long term Co-integral relation with international cotton...