Price of Agricultural Produces in China

China as one of the largest agricultural countries, price of agricultural produces plays a decision role to reflect the overall prices trend in the market. It is considered as the price foundation among all commodities and result in volatility in overall price level. In recent years, rapid development of national economy and urbanization boost price of agricultural produces. Three main types of agricultural produces include cereal (wheat, rice and corn), oil-bearing crops (rapeseed, soybean and peanut) and vegetables will be analyzed in the report. Purchasing Price Index (PPI) will be used to analyze the price of main agricultural produces. The report will process factor analysis of increasing agricultural produces prices and list five main reasons influencing change in price, such as: - Total costs; - Transportation cost and multifarious circulation links; - Minimum cereal purchasing prices; - Urbanization and change in consumption structure; - Adverse weather condition and natural disaster. By adopting Grey Markov Forecast Model, it is predicted that PPI of cereal will increase steadily for a long time. However, oil-bearing crops’ PPI will face a sharp decline from 2014 to 2015. At the end of this report, it will put forward four suggestions in order to stabilize price of agricultural produces as well as prevent and cope with the effects of inflation.