Risk and regulation of emerging price volatility of non-staple agricultural commodity in China

Abstract

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 non
staple 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 non
staple 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.