The continuous decline of international grain prices and the expansion of grain imports is a pure market behavior.

China's grain imports have increased greatly this year. Grain imports, led by wheat, have accelerated sharply this year, with grain imports surging 80.7 per cent in the first seven months compared with the same period last year, according to data released by the General Administration of Customs. This has aroused concerns at home and abroad about China's food security. In this regard, experts pointed out that China has sufficient grain reserves, and the increase in imported grain is due to the fact that the price in the international market is lower than that in the domestic market, not because of a widening grain gap.

Grain imports increased by 80% compared with the same period last year

Since the beginning of this year, China's grain imports, especially wheat imports, have accelerated significantly. China's grain imports, including wheat, rice and corn, rose 80% in the first seven months of this year compared with the same period last year, according to data released by the General Administration of Customs. According to statistics, in July, China imported 1.56 million tons of grain and cereal flour, 260000 tons more than the previous month.

China is a big grain-producing country, so why do we import a lot of grain? In this regard, the General Administration of Customs believes that, first, the domestic demand is strong; second, the price of agricultural products in the international market is low.

It is reported that since November last year, the domestic market price of wheat has been higher than the import-to-shore tax price for nine consecutive months. At present, the international FOB wheat price, plus various fees, is about 10% cheaper than the domestic wheat market price.

Since 2010, China's grain prices have begun to be higher than FOB prices in the international market. The price difference at home and abroad has caused domestic enterprises to increase their grain imports. Experts pointed out that importing an appropriate amount of grain according to the market price difference can adjust the domestic surplus and shortage, and also conforms to the general trend of the internationalization of agricultural trade.

"in addition to the upside-down factors of grain prices at home and abroad, the increase in demand for variety adjustment is also a very important reason." Cheng Guoqiang, a researcher on grain trade at the Development Research Center of the State Council, pointed out that with the improvement of people's living standards, in recent years, the demand for "strong gluten and weak gluten" wheat imported from abroad to meet the demand for processed bread, cakes and high-quality food has increased significantly.

Summer grain increases year after year and has sufficient reserves.

As a matter of fact, at present, China has a bumper grain harvest and abundant granaries. In 2013, China's grain production achieved 10 consecutive increases, and the annual grain output, including cereals and soybeans, exceeded 600 million tons, a record high. In 2014, China's summer grain achieved an "11th consecutive increase". According to the National Bureau of Statistics, the country's total summer grain output in 2014 was 136.6 million tons, an increase of 4.75 million tons or 3.6 percent over the previous year.

From the perspective of grain inventory, Ren Zhengxiao, director of the State Grain Administration, revealed that by the end of 2013, China had 19000 grain storage enterprises of all kinds in urban and rural areas, with a total storage capacity of more than 300 million tons, a 100-fold increase over the beginning of the founding of New China.

"at present, domestic corn and rice stocks are the largest in history, with individual varieties in stock even reaching 60%, 70%, and the grain in the granary is enough for the people of the whole country to eat for more than half a year. Such inventory reserves show that the entire food security situation in our country is in a relatively good period. " Cheng Guoqiang said.

Shi Yan, deputy director of Xinhu Futures Research Institute, believes that it is exaggerated to link the surge in grain imports to concerns about food security. At present, the government's grain inventory is relatively abundant, and the short-term issue that the government is considering now may not be food security, but how to let the market digest the reserves.

Grain collection and storage policy needs to be adjusted

After almost 10 years of implementation, the collection and storage system established to protect the interests of farmers has not only stabilized the market and increased farmers' enthusiasm for growing grain, but also caused the remaining problems of the increase of grain stocks and the large difference in grain prices at home and abroad.

Li Guoxiang, a researcher at the Institute of Agricultural Development of the Chinese Academy of Social Sciences, said that the original intention of the collection and storage policy was to take into account the fact that domestic wheat prices were lower than foreign prices, farmers' enthusiasm for growing grain was not high, and if grain prices were not regulated by the government, the expectations of the market and farmers could not be guaranteed, which could easily lead to selling at low prices and selling at high prices.

One of the problems with the collection and storage system is that it has pushed up domestic grain prices and increased grain stocks. It is reported that China Grain Storage purchased nearly 90 million tons of grain last year, but a large number of grain purchased in support of the market could not be sold because of high prices, and grain processing enterprises lacked interest and could only be stacked in warehouses, resulting in tight storage capacity.

On the one hand, the expansion of grain imports, on the other hand, domestic stocks are difficult to digest, the new dilemma urgently needs to be solved by management. People in the industry pointed out that it is necessary to speed up the reform of the agricultural protection policy, adjust the grain collection and storage policy as soon as possible, and straighten out the grain price mechanism. Ni Hongxing, director of the Trade Promotion Center of the Ministry of Agriculture, said: at present, grain stocks are difficult to digest, and with the further widening of the price gap at home and abroad, the temporary collection and storage policy will not be sustainable, and adjustments will be made in the future to strengthen the role of enterprises.

Relevant experts suggest that in order to solve the upside-down of grain prices at home and abroad, on the one hand, we should form a mechanism whereby grain prices are determined by the market, and the state will no longer interfere in grain prices, gradually establish a target price system for agricultural products, and promote the balance between domestic and foreign markets. On the other hand, by promoting the construction of agricultural production infrastructure, the progress of agricultural science and technology, and the expansion of agricultural operation scale, we should slow down the rising rate of domestic agricultural production costs as far as possible and maintain the comparative advantages of domestic rice and wheat production.