|
|
|
|
|
| Price transmission in hog and feed markets of China |
| ZHOU De, Dieter Koemle |
1、College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, P.R.China
2、Department of Agricultural Economics and Rural Development, University of Göttingen, Göttingen 37073, Germany |
|
|
|
摘要 There is an increasing demand for feed as the industrialization of hog production in China. Land scarcity limits China’s ability to continue increasing its hog production without feed imports, particularly soybean, and the feed markets are increasingly integrated into the global market. This study performs an analysis of price transmission between the hog price in China and feed prices, specifically domestic maize price and international soybean price, from January 2000 to April 2014. We identified a long-term stable equilibrium relationship between the three markets. However, further analyses show that there is no significant Granger causality between hog and feed market, and the long-run equilibrium partially results from Granger causality between the international soybean market and domestic maize market. This suggests that the domestic hog market has been distorted by different policies. The results also indicate that the efficiency of price transmission is very low and it takes about 11 months to correct one-half of any long-run disequilibrium for the hog market in China. Therefore, to stabilize hog price in China, only market intervention to regulate the maize and soybean markets would be insufficient and comprehensive measures need to be taken into account such as hog production modernization, agricultural insurance, epidemic surveillance etc.
Abstract There is an increasing demand for feed as the industrialization of hog production in China. Land scarcity limits China’s ability to continue increasing its hog production without feed imports, particularly soybean, and the feed markets are increasingly integrated into the global market. This study performs an analysis of price transmission between the hog price in China and feed prices, specifically domestic maize price and international soybean price, from January 2000 to April 2014. We identified a long-term stable equilibrium relationship between the three markets. However, further analyses show that there is no significant Granger causality between hog and feed market, and the long-run equilibrium partially results from Granger causality between the international soybean market and domestic maize market. This suggests that the domestic hog market has been distorted by different policies. The results also indicate that the efficiency of price transmission is very low and it takes about 11 months to correct one-half of any long-run disequilibrium for the hog market in China. Therefore, to stabilize hog price in China, only market intervention to regulate the maize and soybean markets would be insufficient and comprehensive measures need to be taken into account such as hog production modernization, agricultural insurance, epidemic surveillance etc.
|
|
Received: 27 July 2014
Accepted: 11 June 2015
|
| Fund: the sponsorship of German Research Foundation (RTG1666), A Project Funded by the Priority Academic Program Development of Jiangsu Higher Education Institutions (PAPD), China, and the National Natural Science Foundation of China (71173110). |
|
Corresponding Authors:
Dieter Koemle, E-mail: dieter.koemle@gmail.com
E-mail: dieter.koemle@gmail.com
|
| About author: ZHOU De, E-mail: zhoude@njau.edu.cn; |
Cite this article:
ZHOU De, Dieter Koemle.
2015.
Price transmission in hog and feed markets of China. Journal of Integrative Agriculture, 14(6): 1122-1129.
|
| Abler D. 2010. Demand Growth in Developing Countries. OECDFood, Agriculture and Fisheries Papers, No. 29. OECDPublishing, Paris, France.Bauer D, Maynard A. 2012. Persistence-robust surplus-lagGranger causality testing. Journal of Econometrics, 169,293-300Chen J, Rozelle S 2003. Market emergence and the rise andfall of backyard hog production in China. In: Proceedingsof American Agricultural Economics Association AnnualConference. Montreal, Canada.Engle R F, Granger C W J. 1987. Cointegration and errorcorrection-Representation, estimation, and testing.Econometrica, 55, 251-276Fan S G, Cramer G, Wailes E. 1994. Food demand in ruralChina-Evidence from rural household survey. AgriculturalEconomics, 11, 61-69FAO. 2014. FAOSTAT electronic database. [2014-04-04]. http://www.fao.org/statistics/en/Fuller F, Tuan F, Wailes E. 2002. Rising demand for meat: Whowill feed China’s hogs? In: China’s Food and Agricultural:Issues for the 21st Century. Economic Research Service,USDA, USA. pp. 17-19Gale F, Marti D, Hu D. 2012. China’s Volatile Pork Industry.USDA Economic Research Service Report. Washington,D.C., USA.Granger C W. 1969. Investigating causal relations byeconometric models and cross-spectral methods.Econometrica, 37, 424-438Greb F, Jamora N, Mengel C, Cramon-Taubadel S V,Wurriehausen N. 2012. Price transmission from internationalto domestic markets. Working paper, Courant ResearchCentre PEG, Georg-August-Universität Göttingen,Germany.Headey D, Fan S. 2008. Anatomy of a crisis: The causesand consequences of surging food prices. AgriculturalEconomics, 39, 375-391Huang J, Qiu H, Scott R. 2008. More pain ahead for China’sfood prices. Far Eastern Economic Review, 171, 8-13Huang J, Wang X, Qiu H. 2012. Small-Scale Farmers in Chinain the Face of Modernisation and Globalisation. IIED/Hivos,Longdon, UK.Jia W, Yang Y T, Qin F. 2013. The study on China’s porkindustry chain price transmission mechanism: Based onprovince comparison. Statistics & Information Forum, 3,49-55 (in Chinese)Johansen S. 1988. Statistical analysis of cointegration vectors.Journal of Economic Dynamics and Control, 12, 231-254Li B, He Q. 2007. Analysis on the short-term fluctuations ofpork prices and its reasons in China. Issues in AgriculturalEconomy, 10, 18-21 (in Chinese)McNew K, Fackler P L. 1997. Testing market equilibrium:Is cointegration informative? Journal of Agricultural andResource Economics, 22, 191-207Nazlioglu S, Soytas U. 2011. World oil prices and agriculturalcommodity prices: Evidence from an emerging market.Energy Economics, 33, 488-496NBSC (National Bureau of Statistics of China). 2013. ChinaStatistical Yearbook 2012. China Statistics Press, Beijing,China. (in Chinese)NDRC (National Development and Reform Commission ofChina). 2010. Compilation of Costs and Returns of NationalAgricultural Product. China Statistics Press, Beijing, China.(in Chinese)NDRC (National Development and Reform Commission, China).2014. The Report on Hog and Maize Price in China. [2014-03-01]. http://www.gov.cn/zfjg/szsctk.htmNie F, Dong L, Bi J. 2009. Fluctuation and cycle of pork pricein China. Paper at International Association of AgriculturalEconomists Conference. International Association ofAgricultural Economists (IAAE), Beijing, China.OECD-FAO. 2013. Agricultural Outlook 2013-2022: HighlightsOECD Publishing, Paris, France.Schneider M. 2011. Feeding China’s Pigs: Implications forthe Environment, China’s Smallholder Farmers and FoodSecurity. Institute for Agriculture and Trade Policy Report.Washington, D.C., USA.Serra T, Gil J M, Goodwin B K. 2006. Local polynomial fittingand spatial price relationships: Price transmission in EUpork markets. European Review of Agricultural Economics,33, 415-436Sharma S. 2014. The need for feed: China’s demand forindustrialized meat and its impacts. In: Global MeatComplex: The China Series. Institute for Agriculture andTrade Policy Report, Washington, D.C., USA.Tan Y. 2010. An empirical analysis on the volatility of aggregatepork supply and its influencing factors. Journal of HuazhongAgricultural University (Social Sciences Edition), 3, 24-29(in Chinese)Toda H Y, Phillips P C. 1994. Vector autoregression andcausality: A theoretical overview and simulation study.Econometric Reviews, 13, 259-285Toda H Y, Yamamoto T. 1995. Statistical inference in vectorautoregressions with possibly integrated processes. Journalof Econometrics, 66, 225-250Tuan F C, Zhang X, Wailes E. 1998. China’s Pork Economy:Production, Marketing, Foreign Trade, and Consumption.USDA International Agriculture and Trade Reports: China,Situation and Outlook Series, WRS-98-3. Washington, D.C., USA. pp. 17-25USDA (United States Department of Agriculture). 2014.Production, Supply and Distribution Online. USDA/ForeignAgricultural Service Report. Washington, D.C., USA.Wang F, Chen J A. 2009. An analysis of conduction mechanismin price fluctuation of Chinese pig breeding industry.Chinese Rural Economy, 7, 31-41 (in Chinese)Wang L, Wu B. 2012. Empirical analysis on fluctuation of porkprice in China. In: Proceedings of Consumer Electronics,Communications and Networks (CECNet), 2012 2ndInternational Conference. Yichang, China. pp. 2569-2572Wu H, Qi Y, Chen D. 2012. A dynamic analysis of influencingfactors in price fluctuation of live pigs-based on statisticaldata in sichuan province, China. Asian Social Science, 8,256-262Wu L. 2006. Integration of China’s major agricultural productmarkets. Working paper. China Agricultural University,Bejing, China.Xiao H B, Wang J M, Oxley L, Ma H Y. 2012. The evolution ofhog production and potential sources for future growth inChina. Food Policy, 37, 366-377Xin X, Tan X. 1999. Pork price determination in China. In:China’s Agricultural Trade and Policy: Issues, Analysis,and Global Consequences. China Agricultural University,Bejing, China. pp. 1999-2006Xu S W, Li Z M, Cui L G, Dong X X, Kong F T, Li G Q. 2012.Price transmission in China’s swine industry with anapplication of MCM. Journal of Integrative Agriculture, 11,2097-2106Yang J, Huang J, Qiu H, Rozelle S, Sombilla M A. 2009. Biofuelsand the greater mekong subregion: Assessing the impact onprices, production and trade. Applied Energy, 86, S37-S46.Yang J, Qiu H G, Huang J K, Rozelle S. 2008. Fighting globalfood price rises in the developing world: The responseof China and its effect on domestic and world markets.Agricultural Economics, 39, 453-464Yu X. 2014. Monetary easing policy and long-run food prices:Evidence from China. Economic Modelling, 40, 175-183Yu X, Abler D. 2014. Where have all the pigs gone?Inconsistencies in pork statistics in China. China EconomicReview, 30, 469-484Yu X H, Abler D. 2009. The demand for food quality in ruralChina. American Journal of Agricultural Economics, 91,57-69Zapata H O, Hudson M A, Garcia P. 1988. Identifying causalrelationships between nonstationary stochastic processes:An examination of alternative approaches in small samples.Western Journal of Agricultural Economics, 13, 202-215Zhang Q, Reed M R. 2008. Examining the Impact of the worldcrude oil price on China’s agricultural commodity prices: Thecase of corn, soybean, and pork. In: Southern AgriculturalEconomics Association Annual Meeting. Dallas, TX, USA.Zhou D, Yu X. 2014. Calorie elasticities with income dynamics:Evidence from the literature. Applied Economic Perspectivesand Policy. doi: 10.1093/aepp/ppu043Zhou D, Yu X, Herzfeld T. 2015. Dynamic food demand in urbanChina. China Agricultural Economic Review, 7, 27-44 |
| No Suggested Reading articles found! |
|
|
Viewed |
|
|
|
Full text
|
|
|
|
|
Abstract
|
|
|
|
|
Cited |
|
|
|
|
| |
Shared |
|
|
|
|
| |
Discussed |
|
|
|
|
