Research On The Function Of Price Discovery In China’s Peanut Futures Market

The futures market is the product of China’s market economy in a specific historical period and is a higher-level market system.It has the function of price discovery,which can make a certain prediction of the future price trend of spot commodities.Making full use of the price signals transmitted by the futures market can help producers and operators adjust their production plans in time and avoid blind production.China is currently the world’s largest peanut producer,and the stable development of the peanut production industry is a major event related to the national economy and people’s livelihood.However,the infrastructure,technical level and other conditions of each peanut planting area in China are uneven,and the production and quality of flowers are easily affected by environmental and climatic conditions,and the price fluctuates sharply by many factors,resulting in greater risks in China’s flower production industry.In order to better respond to national policies and promote the healthy development of peanut production,peanut futures were officially listed on the Zhengzhou Commodity Exchange in February 2021,becoming the only peanut futures in the world.Its listing further enriches the type system of China’s futures market,provides risk avoidance channels for the majority of peanut farmers and peanut spot enterprises,and can more effectively promote the standardization and large-scale development of China’s flower production industry and better serve China’s real economy.Since its listing,after two years of development,the peanut futures market has initially established a price system,the trading system has become increasingly perfect,and the market operation has become increasingly stable.As an indispensable part of China’s agricultural futures market,whether peanut futures can give full play to the price discovery function is not only related to the vital interests of peanut farmers and related enterprises,but also related to the stable development of China’s peanut futures market.Therefore,it is necessary to study the degree of peanut futures price discovery function in China.After summarizing the research results of domestic and foreign scholars on the price discovery function of futures market and the relationship between futures spot prices,sorting out the relevant theoretical foundations,and studying the current operation status of China’s peanut spot market,this paper empirically analyzes the exertion of the price discovery function of peanut futures market in China by establishing VAR model and using correlation analysis,unit root test,cointegration test,Granger causality test,impulse response analysis,variance decomposition and other measurement methods.The empirical test results are as follows:(1)There is a certain degree of correlation between peanut spot prices,but its correlation coefficient is slightly lower than that of other mature agricultural product spot markets in China;(2)The spot price of peanut period shifts into equilibrium in the short term,but in the long run,the two still tend to be equilibrium;(3)The spot price of peanut period has a two-way guiding relationship;(4)The guidance of peanut futures prices to spot prices has a lag,which has long-term effects and a low degree of guidance;(5)The peanut futures market initially has the function of price discovery,but the degree of function is not high,and it needs to be improved;(6)Peanut futures dominate the process of price discovery function.Finally,in view of the degree of price discovery function of China’s peanut futures market at this stage,policy suggestions are put forward,in order to improve the level of price discovery function in China’s peanut futures market.