A Research On Procurement Risk Management Model Of Xinjiang Cotton And Linen Company Under The Normalization Of Epidemic Prevention And Control

Since 1999,great changes have taken place in China’s cotton industry.The proposal of cotton market circulation system and quality inspection system,as well as the comprehensive market-oriented reform measures of Xinjiang’s cotton target price system,have made the cotton industry fly higher and higher by taking advantage of the development of globalization.The sudden outbreak of COVID-19 has caused great challenges to the cotton industry,but the more important question is how to maximize the risk aversion and control costs when the epidemic prevention and control normalization is done.The application of the "insurance + futures" model is regarded by the general public as an innovative progress to deal with the current "three rural" problems.The model provides new risk aversion methods for farmers and agricultural enterprises with the support and cooperation of the four parties,namely the government,insurance companies,futures companies and Futures exchanges."Entitled Trade" can help many companies that do not know how to use financial instruments such as options and futures to control risks.Combined with the relevant theories and experience of hedging,this thesis selects "basis difference price + OTC options" as a trading mode of "Entitled Trade".Then combine "insurance + futures" and "Entitled Trade",put forward the trading model of "insurance +futures + Entitled Trade",and take this as the starting point to explore the effective methods for agricultural enterprises to avoid risks and control costs under the normalization of epidemic prevention and control.In the early stage,the thesis investigated the cotton enterprises in agricultural enterprises,and finally selected Xinjiang cotton and hemp company as the case study object of the new trading mode of the thesis according to the region.Then,focusing on the cost management at the procurement level,the thesis tried the "insurance + futures" model and the "basis difference price + OTC options" model from the two sources of cotton farmers’ acquisition and similar enterprises’ procurement,Finally,through cost analysis and comparison,it is concluded that this transaction model can provide new ideas for agricultural enterprises to avoid risks,reduce costs and increase income.