The long-term trend of China's corn market is good. Industrial policy is not in the process of reform.

On September 17, the eighth International Corn Industry Conference, jointly organized by Dalian Commodity Exchange and China Feed Industry Association, was held in Wuhan, Hubei Province. With the theme of "innovative risk management to help transformation and upgrading", the meeting aims to build an important platform for information sharing, communication and business cooperation. In just one day's agenda, experts from national macroeconomic decision-making departments, industry management departments, business circles, industry organizations and financial investment institutions have formed a wonderful resonance with their wisdom and experience. Through the pain they went through, through the blueprint they drew, we saw a clear direction.

Industrial policy has been continuously improved in the course of reform.

China is a big country in corn production and consumption. From 2004 to 2014, the planting area of corn increased from 381 million mu to 556 million mu, and its proportion in the total grain area increased from 25% to 33%. Corn output increased from 260.6 billion jin to 431.3 billion jin, and its share in total grain output increased from 27.8% to 35.5%. Corn ranks first in China's grain output for several years. Consumption increased from 231.3 billion jin in 2004 to 361.3 billion jin in 2014, accounting for 24 percent to 30 percent of grain consumption. In June this year, the corn stocks of various enterprises across the country exceeded 400 billion jin, resulting in periodic large supply and demand, and the situation that some major producing areas could not be harvested, stored, sold, and financially unable to make up.

In this regard, Hu Hengyang, an inspector of the Agricultural economy Department of the National Development and Reform Commission, believes that the problems existing in the grain regulation and control policy over the past decade have finally been concentrated. No matter the temporary storage price or the purchase price, they do not play a good leading role in the formation mechanism of market value. The direct output of the government is getting larger and larger, which increases not only the financial expenditure but also the flow cost, and forms the production and marketing mode of "import into the market and domestic into the warehouse". At present, the import and export trade deficit of agricultural products in China is constantly expanding, which makes the regional balance more difficult. The output in the main producing areas increased, the gap in the main selling areas increased, and the cross-regional grain circulation increased. At present, 75% of grain stocks are in the main producing areas, while the main selling areas account for only 9%. The increase in products has increased the transportation pressure and risk.

It is urgent to improve the regulation and control policy. First, it is necessary to change the mode of regulation and control. On the one hand, it is necessary to promote the transformation of the minimum purchase price and temporary collection and storage policy to "price-compensation separation", and raise the target price insurance level, target price loan quota, and so on. On the other hand, it is necessary to increase subsidies for agricultural products to ensure the stable income of farmers. Second, it is necessary to promote the transformation of import and export regulation from "mainly controlling imports" to "making effective use of the international market." On the basis of making more use of the international market, the regulatory role of agricultural products will be more prominent. Third, it is necessary to promote the transformation of reserve regulation from "price intervention" to "supply and demand regulation". Under normal circumstances, the central government no longer carries out temporary collection and storage and market release of reserves, and local reserves should be further strengthened.

The next key work is to actively adjust the import and export strategy of agricultural products, rationally determine the import scale of major agricultural products, actively implement the strategy of import diversification, and be more pragmatic and flexible in opening up the market and admitting. strengthen the combination of imports and reserves. A mechanism for adjusting import reserves will be established. The second is to encourage agriculture to "go out." Focus on the construction of market and policy support system for agricultural products. The purpose of going out is not to bring in, but to enhance the production competitiveness and contribution rate of China's agriculture in the world.

Corn is the main ingredient of feed and the main raw material of China's pig industry. Yang Zhenhai, deputy director of the Animal Husbandry Department of the Ministry of Agriculture, said that at present, pig prices in China have entered an upward cycle, and this trend is international. Since May this year, pork prices in the United States have risen by more than 25%. In China, live pig prices have risen by 50% and pork prices by 33% since March. But in 2014, 735 million pigs were fenced nationwide, with a loss of 80.9 billion yuan. Pig farming did not achieve high profits, but entered a restorative and compensatory rise after a long period of low prices and farming losses. The current upward cycle will be maintained for some time. As long as there is no major epidemic, there will be no major fluctuations for some time to come. While the price of feed such as corn is stable, it also shows that there is little factor driving up the cost.

The Chinese government has made every effort to promote the modernization of the pig industry and promote industrial stability by means of scale and standardization. Hubei has made great efforts to promote large-scale pig farming in the past decade. At present, the proportion of pigs raising more than 500 pigs has reached 41.8%, an increase of 7.3 percentage points over 2010. The focus of the measures taken by the Ministry of Agriculture to stabilize industrial development is to reduce direct government intervention in production and market, and to further strengthen information monitoring and early warning services. We will pay more attention to supporting policies such as finance and insurance, especially the three major difficulties of farming land, manure disposal and loans, and will actively explore ways such as credit guarantee and interest discount to guide the entry of financial capital. It is necessary to expand the coverage of pig policy insurance, relieve worries for financial support, and actively promote the pilot project of pig target price insurance.

The enterprise has gradually found the right direction of development in the labor pains.

China's corn starch processing is mainly in two regions: northeast and North China, accounting for 80% of the country's corn processing. In recent years, due to the continuous expansion of cassava starch import, expanding from south to north, the proportion of cassava starch in starch has increased from a few percent to 30%. Tong Yi, general manager of the biochemical division of Cofco, is worried about this. He believes that the state-backed market purchase price has pushed up the corn market price. The auction price of corn purchased by the northeast supporting market is 2330 yuan per ton, which is more than 2400 yuan after processing. Due to the high cost, the northeast corn starch processing continues to reduce, reducing about 3 million tons of corn processing capacity and reducing the corn starch output by about 400000 tons.

In addition to corn starch, the prices of high-tech by-products such as corn germ oil and corn meal processed by enterprises are also in a low state, accounting for 30% of the total processed products, and their prices have fallen by 9%. Corn starch was basically at a loss from 2012 to 2014, and demand for corn starch continued to decline in the first half of this year. The enterprise lost 300 to 400 yuan per ton of corn and 700 yuan per ton of feed. Corn is processed into fructose and used in beverages and beer with a return of only 1% to 2%.

But on the whole, China's starch consumption has increased from 10 million tons in 2004 to 17 million tons now, showing an increasing trend. Tong Yi believes that after the shock, the downstream demand of the industry will eventually improve. Enterprises should make new preparations for this, first, be prepared to deal with more pressure, in addition to high costs, but also import shocks. The national policy is to keep opening up, and the carrying capacity of enterprises must also continue to rise. Second, with the advance of marketization, corn, as a basic raw material, is bound to form a stable market system. The processing industry will walk out of the predicament under the new normal and move towards a comprehensive growth model that relies on technology improvement, cost reduction, product development, brand effect and the effective use of new information technology and market operation technology to achieve stable development.