The Impact Of International Fertilizer Price Fluctuations On China’s Corn Market

In agricultural production,chemical fertilizers have always played a crucial role in increasing grain yields.However,in recent years,due to the global inflation and the prominent supply-demand contradictions in the international fertilizer market,prices for fertilizers have continued to rise globally.To mitigate the risks brought by high international fertilizer prices,China has implemented a series of measures to ensure stable prices and production domestically.As a major producer and exporter of fertilizers,China should be capable of preventing risks associated with fluctuations in international fertilizer prices.However,domestic fertilizer prices have also soared under the protection of policy.This raises a noteworthy question: Will fluctuations in international fertilizer prices affect China’s grain market? What are the mechanisms of this impact? What is the degree of influence? Corn is the grain crop with the largest fertilizer application rate in China,and its import volume has grown annually.The rigid increase in corn demand in China requires the utilization of two markets and two resources,domestic and overseas,to ensure effective domestic corn supply.In this context,studying the impact of international fertilizer price fluctuations on China’s corn imports and production is of great practical significance.This article analyzes the domestic and international fertilizer market,including the current demand,trade situation,and export requirements from China’s perspective.The study further explores the transmission mechanism of fertilizer price fluctuations to China’s corn market.BEKK-GARCH and TVP-VAR models are used to examine the impact of international fertilizer price fluctuations on China’s corn imports.The Nerlove model is employed to investigate the impact of international fertilizer price fluctuations on China’s corn production.The study empirically verifies the mechanism of "international fertilizer price fluctuations-domestic fertilizer prices-domestic corn production".The main conclusions of the study include: Firstly,China has extensive trade with the international fertilizer market,and the risk associated with the international fertilizer price fluctuations will be transmitted to the domestic market through fertilizer trade,ultimately affecting China’s corn imports and production.Secondly,International fertilizer price fluctuations increase the risk of China’s corn imports.The fluctuation in international fertilizer prices has a spillover effect on China’s fertilizer prices,which in turn raises China’s corn production costs,causes cost substitution effects,and results in an increase in domestic corn imports,thereby increasing the cost and risk of China’s corn imports.Finally,International fertilizer price fluctuations have a significant negative impact on China’s corn yield and planting area.The risk of fertilizer price fluctuations is transmitted domestically through the fertilizer market,causing an increase in domestic corn production costs or a reduction in fertilizer application rates in China’s corn production.Based on the above research findings,relevant policy suggestions are proposed at two levels to stabilize the domestic fertilizer market and ensure effective corn supply.To prevent price fluctuation risks,China needs to enhance its bargaining power in the international fertilizer market and establish a fertilizer price warning mechanism.As for responding to price fluctuation risks,China needs to improve its fertilizer price subsidy policy and enhance its fertilizer supply and storage capabilities.