Transmission Effect Of International Rice Price Fluctuation On Domestic Rice Price

Foodstuffs are the basis of people’s life.The fluctuation of food price is not only related to people’s livelihood,but also to the overall price level.As one of the main food crops,rice plays an extremely important role in food security in China.It is of great significance to safeguard the interests of farmers and ensure national food security.Under the background of frequent fluctuations of rice prices and China’s being the largest importer of rice in the world.It is of great significance to analyze the transmission effect of international rice price fluctuation on domestic rice price.It is also of great significance to explore the impact of international rice prices on domestic rice prices and to analyze the integration relationship between rice and other grain varieties.Based on the data of 2002-2017,this research analyzed the present situation of rice supply and demand,trade and price fluctuation in international and domestic markets.Using ADF unit root test,Johansen cointegration test and vector error correction model,the relationship of long-term equilibrium and short-term input between domestic rice price and international rice price was tested.The impact of international rice price fluctuation on domestic rice price was investigated by impulse response function and variance decomposition.The long-term and short-term asymmetric transmission effects of international rice prices on domestic rice prices were investigated by using the nonlinear autoregressive distributed lag model.Considering the formation mechanism of domestic rice price,the influence degree of international rice price was analyzed,and the equilibrium relationship between the price of rice and other grain varieties in the international and domestic markets was further tested.The results show that rice production and consumption are in a fluctuating upward trend in both the world and China,while stocks are in the process of first decreasing and then rising.China’s rice imports account for an increasing proportion of the world’s rice imports,while exports account for a lower proportion.From the perspective of price level,international rice prices fluctuate greatly,while domestic rice prices are relatively stable.Johansen cointegration test shows that for every 1% increase in international rice price,the equilibrium price of domestic rice will rise by 1.091%.VEC model results show that when domestic rice price is disturbed and deviates from the long-term equilibrium price,it will converge to the long-term equilibrium state itself.The regression results of NARDL model show that the fluctuation of international rice price has asymmetric transmission effect on domestic rice price in the short and long term.The long-term transmission coefficient caused by the decline of international rice price is small.The main reasons are the lowest purchase price of rice,the regulation of rice reserve system and rice trade policy.By investigating the formation mechanism of rice price in China,we can conclude that international rice price has a significant impact on domestic price.Johansen cointegration test shows that rice and other grain varieties prices in the domestic market maintain a long-term integration relationship.There is an integration relationship between rice and wheat and soybean prices in the international market,but there is no long-term integration relationship between rice and corn prices.Based on the above conclusions,this thesis puts forward some policy suggestions from the perspectives of strengthening the comprehensive production capacity of rice,establishing the early warning mechanism of grain prices,reducing the cost of grain production and improving the construction of rice futures market.