The Impacts of Chinese Exchange Rate Policy on World Soybean and Products Markets

Ji Luo and Gary Williams

No 205075, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: This study examines the impacts of China’s exchange rate policy on commodity market with a lengthy vertical supply chain. By taking the soybean industry as a case, the analysis considers the joint effects of the undervaluation of the RMB/$US exchange rate and the interactions along vertical supply chain relative to prices, supplies, demands, and trade of world soybean and soybean products, In the analysis, the effects of China’s monetary policy of RMB undervaluation on world soybean, soybean meal and soybean oil supplies, demands, prices and trade over the 1993/94 through 2012/13 are measured. Simulation results show RMB undervaluation has significant effects on world soybean and soybean products markets. China’s monetary policy of RMB undervaluation is likely to increase China’s soybean price and reduce China’s soybean imports. It is also found that China has borne most of the burden from its own exchange rate undervaluation policy over the years.

Keywords: Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Financial Economics; Food Consumption/Nutrition/Food Safety; International Development; International Relations/Trade; Livestock Production/Industries; Marketing; Production Economics (search for similar items in EconPapers)
Pages: 30
Date: 2015
New Economics Papers: this item is included in nep-cna
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205075

DOI: 10.22004/ag.econ.205075

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