Research On The Efficiency Of China’s Pig Futures Market

The futures market plays an important and irreplaceable role in the national economy.How to use the futures market to better serve the real economy is one of the important topics that need to be explored and studied at present.Only when the futures market has a certain degree of effectiveness can it demonstrate its important role and influence in price discovery,risk management,and resource allocation.Therefore,the study of the effectiveness of the futures market has important practical significance,which can better showcase the functions of the futures market.Pork is the main force of meat consumption in China,and the pig industry is related to China’s food security,national economy,and people’s livelihood.It plays a crucial role in China’s agricultural economy.However,the existence of the "pig cycle" has seriously hindered the healthy development of the pig industry,especially the pig breeding industry.In each round of "pig cycle",a large number of enterprises and farmers are eliminated from the market.In January 2021,the pig futures contract widely expected by the pig industry will be listed in Dalian Commodity Exchange.The study of the effectiveness of the pig futures market and the analysis of the correlation between pig futures and spot prices will help to explore the development level of the domestic pig futures market and provide a theoretical basis for risk control strategies.In addition,this is also beneficial for providing constructive suggestions for policy makers and regulatory authorities to manage and regulate the futures market at the macro level.By promoting the maturity and standardization of China’s pig futures market,market participants can have a deeper understanding of market conditions and information,thereby providing reference for them to avoid risks.When formulating production and business strategies,this will enable them to refer to relevant data and information and make informed decisions based on it.This paper combed the representative relevant literature on the effectiveness of the futures market,summarized the development context and current situation of the effectiveness of the futures market,summarized the situation of China’s pig futures Spot market,and selected the most representative real transaction data of Henan Province in China’s pig futures market and Spot market,Conduct empirical research on the effectiveness of China’s pig futures market.At present,there are few literatures on the effectiveness of pig futures.This paper concludes that from the perspective of information effectiveness,the daily settlement price series and High-frequency trading price series of pig futures prices in China do not obey random walk,and the pig futures market is not weakly efficient;From the perspective of price discovery,the spot price of live pigs cannot cause changes in the futures price of live pigs.The futures price of live pigs has a certain guiding effect on the spot price of live pigs,and the price discovery function of the futures market of live pigs has a certain efficiency.Finally,considering the factors that constrain the effectiveness of China’s pig futures market,relevant policy suggestions are proposed to improve the effectiveness of China’s pig futures market,in order to promote the healthy and orderly development of China’s pig futures market.