Empirical Study On Integration Of Maize Markets In China

As the second largest grain crop, maize’s effective supply has played a crucialrole in ensuring our nation’s food safety. Moreover, the consumption of maize notonly comes from grain rations and feed, but also comes from the production ofindustrial alcohol, biomass energy and industrial asylums. Therefore, the fluctuationof maize price could cause important impact on the whole maize industrial chainincluding producer, consumer and intermediary business. So, it’s necessary to studymaize market structure and its operation.In market-oriented economy, each section of the whole social activities (such asproduce, allocate, exchange, consume) and its component (such as price, supply anddemand, compete, interest, wage, etc) are connected and restricted mutually viamarket. Meanwhile, they can achieve self-balancing. In modern market activities, thelaw of price bears the feedback of all kinds of economical information. As the carrierof transmitting economical information, price law reflects the direction of economicalvariables. While market integration reports the price link degree of two markets whichhave trade flows. The higher the extent of market integration is, the better the functionof market mechanism develops. Correspondingly, market efficiency is higher.Otherwise, market isolation would hider the development of the whole society andaffects the development of market healthily.This paper firstly reviews the literatures, and then introduces the methods andprice data used in the part of empirical research in details. After that, from the view ofmaize’s supply and demand、the fluctuation behavior of different areas and so on, theessay investigates general market analysis and grasp the maize market in our countryin general. Following that, by means of co-integration, ECM, etc, the paper studies themarket integration of major maize producing areas and sales areas. Finally, the paperdraws some conclusions according to the empirical study and proposes somereasonable suggestions for increasing the market efficiency.