Abstract

Xin Miao, Bo Yu, Bao Xi and Yan-hong Tang

The development of agriculture penetrated in China’s history but recently has to face emerging challenge of drastic price volatility caused by pernicious speculation. The year of 2010 saw drastic price volatility of nonstaple agricultural commodities, such as green beans, garlic and ginger, in China’s agricultural market. The drastic price volatility brought immense adverse effect to Chinese market expectation and people©s daily living, and aroused extensive social concern in China. Speculation and price manipulation emerged from information asymmetry may induce herd behavior under the pressure of high inflation and people’s panicky emotion. The related risks were analyzed and suggestions were put forward as to what possible cures are effective countermeasures and what ways may contribute to prevention of emerging price volatility of nonstaple agricultural commodity. This paper contributed to identifying risks and vulnerable parts of non-staple agricultural commodity market, and was important for preventing cascading risk effects. It offered a new insight for agricultural market regulation, and contributed to agriculture research as well as market management and public administration. As other developing countries may also face similar problems in their agricultural markets, this paper has potential broad sense and enlightenment.