Analysis Of The Impact Which International Food Prices On China’s Food Prices

The food problem is directly related to the basic level of living in China, food price isthe core of the food problem, and also an important factor which affecting our foodsecurity, so it is drawing more and more people’s attention. Scholars’ study found that withthe growing of the trading activities between China and the international grain market,some varieties of grain are becoming increasingly dependent on the international grainmarket, China’s food prices are more and more influenced by impact of the internationalfood prices. Especially in recent years, because of the oil prices, financial factors, theamplitude and frequency in international food prices changes are becoming greater, whatwill be the exact trend, which factors mainly influence future food prices, which kind ofways are the best ways to regulate food prices, this is a question worth considering.On the basis of summing up some scholars, papers on food price volatility aredescribed in detail, citing the impact of international food prices fluctuate short-term andlong-term reasons, and analyzes the impact of international food prices; Subsequently,using the international price fluctuations in crude oil prices, the international market priceof the real effective exchange rate of the U.S. dollar as well as four food crops to establisha panel data, the effects of fluctuations factors determined by the co-integration andregression international food prices, and basing on the VEC model, we test the impact offood prices of international grain market on China. Furthermore, we analysed the maindelivery mechanism from the national food prices to domestic food prices. At last, wecombined with BEKK-GARCH model to study the spillover effects of international grainmarket price volatility on China’s grain market volatility.The results show that: in the long run, the real effective exchange rate of theinternational crude oil prices and the dollar is an important factor of international foodprice volatility, international futures and spot market prices and movements in futures andspot market prices of domestic food grain is basically the same, the futures market and spotmarket are two main channels which transfering the prices; in the short term, fluctuationsin international food prices will spread to some extent the Chinese market, pricefluctuations in international grain market volatility on the Chinese food market hasspillover effects.