MySheen

We might as well set up a "vegetable futures market" to stabilize the vegetable price.

Published: 2024-11-21 Author: mysheen
Last Updated: 2024/11/21, Vegetable farmers (or vegetable purchasers) decide the amount of production in the coming year according to the futures price, and carry out short hedging; the vegetable market (or wholesale market) determines the quantity to be purchased in the coming year according to the futures price, and carries out long hedging. According to the Wuhan Evening News, this year,

Vegetable farmers (or vegetable purchasers) decide the amount of production in the coming year according to the futures price, and carry out short hedging; the vegetable market (or wholesale market) determines the quantity to be purchased in the coming year according to the futures price, and carries out long hedging.

According to the Wuhan Evening News, there are 2500 mu and 28 million jin of wax gourd in Wuhan this year. Wax gourd last year 40 to 81 jin, buyers scramble to collect, this year 4 cents, no one to collect. The vegetable farmer calculated that even if he sold it, he could not earn back the freight. Many people simply abandon the wax gourd in the field and let it rot.

It is often reported that China's agricultural producers have suffered losses as a result of bumper harvests. This is the case, including pork, rice, vegetables and so on. The reason why a bumper harvest hurts farmers, the materialization reason is that the shelf life of agricultural products is short and can not be preserved for years and years. The inherent reason is that the price elasticity of agricultural products is small, once the supply changes, it will cause greater price fluctuations.

This characteristic of agricultural products is a worldwide problem. In order to solve the problem that the price of agricultural products is abnormally low in a bumper harvest and abnormally high in a bad harvest, and in order to reasonably balance the annual supply of agricultural products, developed financial markets have introduced agricultural futures, such as wheat, soybeans, pig futures and so on. China's Dalian and Zhengzhou Futures exchanges also have some varieties of agricultural futures.

But for the largest category of agricultural products, namely vegetables, including China, there is no mature vegetable futures. China's primary industry has a large employment population, and the prices of vegetables and other agricultural products fluctuate, which do great harm to farmers and their agricultural industry. Therefore, the expectation of the futures market of agricultural products such as vegetables in China is higher than that of overseas. On the issue of vegetable futures, there is no need to wait for a mature international futures market before going to "shanzhai". It is entirely possible to explore a set of feasible vegetable futures market and its operating mechanism.

The reason for establishing a vegetable futures market is very simple. Vegetable farmers (or vegetable purchasers) decide the amount of production in the coming year according to the futures price, and carry out short hedging; the vegetable market (or wholesale market) determines the quantity to be purchased in the coming year according to the futures price, and carries out long hedging. In that case, the price of vegetables can be known as early as a year, so the supply will be roughly determined, and there will be no annual phenomenon of supply, and there will be no sharp rise and fall in prices. Even if the price fluctuates, if the price falls, although the spot price of vegetable farmers falls, it will make up for the loss of the spot market through the money earned by short selling in the futures market; corresponding to the wholesale market, if the price rises, then the loss in the spot market can be made up for by doing more in the futures market.

At present, there are so-called vegetable futures markets in some places, but the vegetable futures market mentioned in this paper is a standardized financial market. In order to make the vegetable futures market operate stably and not be manipulated by power, capital and dark scenes, we must have some conditions, first of all, to enter the market, that is, futures contracts must be traded in China's three major futures exchanges. The second is the restrictions on the identity of traders, which must be vegetable farmers (or vegetable purchasers), vegetable markets (or wholesale markets) to prevent capital manipulation.

What is more important is the standardization of trading contracts. Due to the vast territory of China, the types, production and maturity of vegetables in different places are different, the exchange can formulate different varieties of vegetables in different regions according to local conditions, and set up local delivery warehouses or places in accordance with natural conditions.

The proportion of China's primary industry is still large, especially the number of employees in China's primary industry is extremely large, so there is the greatest demand for the launch of vegetable futures market. At present, the materialization of traffic and communication conditions in China has been quite developed, and the problems of transportation and warehousing for a certain period of time have been easily solved, which has laid a good material foundation for the launch of vegetable futures.

 
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