China may reproduce the crisis of aging grain

China's grain prices are upside down from the international market, the scale of grain stocks is increasing, and the auction of temporary grain reserves continues to encounter difficulties. The turnover rate of national temporary storage rice and temporary storage corn auctioned on April 9 was only 0.02% and 5.13%, respectively.

Under the aura of "11 consecutive increases" in grain production, the stocks of the three staple grains are high. Ren Zhengxiao, director of the State Grain Administration, said publicly during the "two sessions" that "there is a periodic surplus of some varieties, especially corn." Corn and rice show the superposition of high yield, high purchase and high stock.

Take corn as an example. In 2013, in 14 years, the market organization said that the acquisition of corn temporary storage created a "huge inventory". As of March 31, 2014, the cumulative purchase of temporary storage corn in March 15 reached 76.11 million tons, an increase of 12.96 million tons over the same period last year. China does not release grain inventory figures. According to relevant agency data provided by Wande Information, China's corn inventory reached an all-time high of 106 million tons in 2013 and 2014, with an inventory-to-consumption ratio as high as 59.73% at the end of the year. It is much higher than the 17% food security standard set by the Food and Agriculture Organization of the United Nations. Even if some people think that China's grain circulation conditions are not good, the safety value should be about 30%, and the existing inventory is also much higher.

Under the pressure of huge stocks, on April 9, before the end of the temporary corn purchase period, the State Grain Administration launched a corn auction, more than a month earlier than last year, and planned to sell 311449 tons of national stored corn in 2012. However, even if a large number of acquisitions caused a sharp decrease in the circulation of corn in the market, the actual turnover was only 15968 tons, with an average transaction price of 2497 yuan / ton. The total turnover rate of the national temporary storage corn auction in 2014 was only about 1/4.

The sales of temporary stored rice are even worse. 1282297 tons of mid-and late-season indica rice in 2013 were planned to be sold on April 9, but the actual transaction volume was only 220 tons, with a transaction rate of 0.02%, with an average transaction price of 2700 yuan per ton. According to statistics, in 2014, the state put a total of 64.4759 million tons of policy-oriented temporary storage rice into the market, with an actual turnover of 4.2274 million tons, with a transaction rate of 6.56%. As of the end of 2014, the temporary rice stocks acquired since 2011 have only digested about 4.28 million tons in three years, and together with the special transactions of about 1.53 million tons in January 2015, the total output is still less than 6 million tons.

Ma Wenfeng, an analyst at Oriental Iger, told Caixin that poor sales in temporary storage have a lot to do with poor grain quality. Grain is stored all the year round, and the quality is getting worse, and many enterprises do not want it. He said the grain should have been stored for a year and left the warehouse, "but the corn sold this time is still from 2012." The market-supporting acquisitions that began in 2004 have become more and more unsustainable. According to the original design, after the State Reserve has acquired a large number of grain sources, it can be sold at a reasonable price. However, the situation has changed a lot in recent years. "I suggest that the relevant departments give up selling at a reasonable price, otherwise the grain will not be sold." Ma Wenfeng said.

Market participants generally believe that a very important change in the situation is the huge price gap at home and abroad. On April 8, the total cost of US No. 2 yellow corn to the Chinese port after duty payment was about 1570 yuan / ton, nearly 1,000 yuan lower than the average transaction price of stored corn. In March, the customs value of domestic corn, rice and wheat per ton was about 810,900 and 700 yuan higher than that of the same varieties, respectively, and the price difference of soybeans was even higher, reaching 1600 yuan per ton. Under the huge price difference, China's imports have increased greatly. In 2014, China imported 19.51 million tons of grain (that is, grain according to international statistics), an increase of 33.8 percent over the same period last year, reaching an all-time high. According to estimates by the Ministry of Agriculture, about 50 million tons of grain in China were non-essential imports in 2014. The relevant official leaders have openly admitted that there is a large number of smuggling.

At present, China's three staple grains are protected by an additional 65% tariff, and imports have not yet had a comprehensive impact on the country. However, Han Jun, deputy director of the Office of the Central Financial and Economic leading Group, said at the Tsinghua Forum on Agriculture, Countryside and Peasants held at the end of 2015 that if no policy adjustment is made according to the current trend, grain will break through the second line of defense around 2020. "then we will not be able to resist the strong impact of low-priced foreign agricultural products."