Grain circulation ushered in a "labor pains period"

The price has fallen back to the level of ten years ago, and the biggest customer, the national grain depot, has not accepted it. It's the annual grain season again. What are the developments in the grain purchase and sale market this year? A reporter from Outlook Newsweek went deep into the front-line survey of China's major grain producing areas and found that in the first purchase and sale season after the reform of China's corn collection and storage policy, corn purchase and sales faced the double problems of falling prices and weak demand.

The northeast region is the region with the largest grain output, commodity volume and transfer volume in China, accounting for about 1/4 of the total grain output of the country. Corn is the largest grain variety in this region. The planting area of corn in Heilongjiang accounts for about half, and most of the sown area of grain crops in Jilin is corn. Even though part of the planting area of corn has been reduced this year, corn is still the largest and most productive grain variety in Northeast China.

Compared with previous years, great changes have taken place in the grain market this autumn. After the cancellation of "supporting the market" of cotton and soybeans, the corn temporary storage policy implemented for many years in Northeast China has also ushered in a major adjustment. In March this year, the corn "support market" was cancelled, and the purchase and sale of corn in Northeast China will change the "policy city" of previous years and implement "market-oriented acquisition".

Experts in the grain sector believe that the temporary purchase of corn has been cancelled, the market digestion capacity is limited, farmers' grain storage capacity is insufficient, and China's grain circulation has entered a "labor pains period." At present, it is necessary to promote processing transformation and market circulation; in the long run, it is necessary to speed up agricultural supply-side reform, improve effective supply, reduce production costs, and enhance the international competitiveness of agriculture.

Corn prices have fallen sharply.

At present, new corn has been sporadically listed in Northeast China, and the price is much lower than that of the same period last year. A survey from the Heilongjiang Grain Industry Association shows that the purchase and sale of spot corn in Heilongjiang is relatively light this week, and the price of third-class new corn after drying is only 1520,1540 yuan / ton.

Monitoring data obtained by a reporter from Outlook Newsweek show that northeast deep processing enterprises have successively opened scales to buy new corn, including 1450 yuan / ton for Jilin fuel ethanol enterprises, 1400 yuan / ton for Zhalantun enterprises in Inner Mongolia, and 1570 yuan / ton for Kaiyuan enterprises in Liaoning Province, both of which have dropped sharply compared with the same period last year. The price of corn is slipping to where it was ten years ago.

Since the introduction of China's corn temporary storage policy in 2007, the price of corn in Heilongjiang has risen from 1380 yuan / ton to 2200 yuan / ton in 2014. The temporary storage price of corn fell for the first time in 2015. However, compared with the import price, the temporary storage price of 2000 yuan / ton is still hovering at a high level.

Under the influence of "supporting the market" in the corn storage era, corn prices in Northeast China have been running at a high level. Most of the corn did not enter the market, but entered the state treasury and became the "policy grain". This is an important reason for "the storage of national grain, the entry of foreign grain into the market, and the high level of grain stocks." In the view of some local cadres, no longer "propping up the market" means that corn will return to the market.

Not only corn prices in northeast China have fallen, corn prices in North China have also continued to fall, and corn prices in southern sales areas have also shown a downward trend. Industry insiders analysis, the current large-scale supply of summer corn in North China market, northeast corn also began to appear on the market sporadically. With the continuous listing of corn in the two major producing areas and the gradual increase in market supply, domestic corn prices will continue to fall.

Shi Guimin, deputy general manager of Beidahuang Grain Group, and Kui Xiuchun, deputy general manager of Dalian Guize Trading Company, estimated that after the listing of corn in Northeast China, the price of dry grain will be 1350,1450 yuan per ton. This means that the price of new corn may return to the level of a decade ago. Under the background that there are no other favorable factors in the market, it is expected that the price of corn may fall directly below the psychological price of farmers.

At present, some market signals are gradually released. Recently, at the 2016 China Autumn Grain and Oil Market Analysis and Trade Fair held in Harbin, experts attending the meeting believed that in the first year when the temporary storage and acquisition policy was cancelled, the corn market was bound to face the situation of repricing.

Cao Zhibiao, director of the Market Monitoring Department of the State Grain and Oil Information Center, told this reporter that the reform of the national corn collection and storage system and market pricing have led to strong expectations of a decline in corn prices, and expectations of increasing production at home and abroad have aggravated the imbalance between supply and demand. These factors determine the downward trend of domestic corn prices.

The grain market is quiet

A reporter from "Outlook" Newsweek found in many places that most of the market-oriented acquisition subjects hold a wait-and-see attitude. According to more than a dozen responsible persons of grain purchasing enterprises interviewed, due to the loss of temporary storage support, there may be no market for the corn purchased, which will result in a backlog of grain and occupy a lot of funds, so most of them dare not buy it rashly.

Xie Mingdeng, general manager of Xinhang Grain Economic and Trade Co., Ltd., Tangyuan County, Heilongjiang Province, said: "after the corn purchased in previous years is dried, it can be sold to China Grain Storage without worrying about the market." The temporary storage policy is cancelled this year, so we have no choice but to focus on the acquisition of rice, and the corn will depend on the situation. "

"at this time in previous years, some grain brokers have already started their activities, at least to contact some major grain growers and grain depots in advance, but there has been no movement this year." Wang Jun, general manager of Yi'an Grain Depot Co., Ltd. in Yi'an County, said that the corn harvest is about to begin, but this year's grain market is "quiet."

"this year, farmers who are used to selling corn to state warehouses have to find new customers. Can not find new customers, this year's grain circulation is not only the problem of low grain prices, some corn may face difficulties in selling. " His worries about the situation of corn harvesting and storage this year are more common in the northeast.

Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, analyzed for our reporter that there are mainly two exports of corn at present. On the one hand, the feed industry, the demand is relatively stable; on the other hand, deep processing, corn prices fall, to a certain extent, will stimulate the import of corn and its substitutes to reduce, driving the operating rate of deep processing enterprises to increase. Although it can free up a piece of room for acquisition, it cannot offset the impact of the loss of the state treasury, and the situation of corn purchase and sale is still grim.

Some grass-roots cadres in Northeast China believe that if the listing price of corn is too low, farmers' psychology of cherishing sales will also increase, coupled with the lack of motivation for market-oriented buyers to enter the market, there will be a cold purchase and sale of corn, or even a periodic "stalemate."

In addition to being affected by the adjustment of grain purchase and marketing policies, the decline in grain quality in some areas has also aggravated the pains of the grain purchase and marketing market. This summer, affected by typhoons, floods, droughts and other bad meteorological disasters, obvious disasters occurred in some provinces in the northeast and south, and the quality of grain in some areas declined, which also aggravated the "labor pains" in grain circulation.

Li Guoxiang and other experts believe that under the phased and structural contradiction between supply and demand, the state does not support the market, the market digests the limited situation, and the circulation of the grain market has entered a certain "adjustment period." For farmers, if the subsidies given by the state cannot offset the impact of falling grain prices, then farmers will face a certain period of "labor pains" in selling grain. "experts believe that the adjustment of corn purchase and marketing policies in Northeast China will directly affect the trend and purchase and sale of grain prices throughout the country, and even affect the safety of grain storage and agricultural production next year."

At present, many farmers store grain in the form of "lying on the ground", and the way of keeping it lags behind. According to some local cadres, if there is an alternation of cold and warm weather, corn with high moisture is extremely prone to the risk of "bad grain" such as mildew and decay during storage. Unsold corn may have a large area of "hold back grain" phenomenon. Once the cooperatives and major grain growers suffer losses due to the backlog of corn and bad grain, it will affect grain production next year.

Speed up supply-side reform

In order to "actively and steadily promote the reform of the corn collection and storage system, and earnestly do a good job in corn purchase in Northeast China this year," the National Development and Reform Commission, the State Grain Administration, the Ministry of Finance, the Ministry of Agriculture and other departments jointly issued a "notice on doing a good job in corn purchase in Northeast China this year" at the end of September, clearly pointing out that "this year is the first year of reform, and it is very important to do a good job in corn purchase under the new mechanism." It also puts forward the relevant requirements from eight aspects, such as ensuring the acquisition credit funds, guiding the market-oriented acquisition, arranging the warehouse capacity in advance, and strengthening the docking of production and marketing.

In the view of experts, the adjustment of corn purchase policy in Northeast China is related to the market regulation and control system of agricultural products and the structural reform on the agricultural supply side, which will have a far-reaching impact on China's food security. In view of the new policies of this year's grain market and the new developments and problems arising therefrom, some local cadres and experts have suggested:

First, encourage and support the establishment of a market-oriented acquisition system with state-owned grain purchasing and marketing enterprises as the main body. State-owned grain enterprises should seize the speed of grain auction and take advantage of the favorable opportunity before the new grain goes on the market to vacate the warehouse and expand the storage capacity. At the same time, we should do a good job in coordinating loans with the Agricultural Development Bank and other preparatory work to ensure grain harvesting on time. Private grain enterprises should also innovate purchasing methods, pay close attention to the export of corn intensive processing industry, rely on large grain enterprises and large processing enterprises, and adopt joint, cooperative, and reserve methods to open up the market and open up the market.

The second is to strengthen the publicity of the policy of market-oriented acquisition of corn to create a good atmosphere of public opinion. Shang Qiangmin, vice president of the China Society of Grain Economics, suggested to increase publicity on market-oriented acquisitions, introduce its significance, and clarify rumors that emergency storage may be initiated in some places, so as to avoid farmers waiting to start "emergency" collection and storage because of low market prices. Increase the pressure of collection and storage.

The third is to strengthen the construction of "Farmers' Scientific Grain Storage Project" and guide farmers to store grain scientifically. Grass-roots cadres believe that the relevant departments launched the scientific grain storage project for farmers in 2007, and achieved certain results. We should also continue to strengthen the training of farmers' scientific grain storage knowledge, increase the research and development and popularization of new green grain storage technology and new equipment, and improve farmers' scientific grain storage level. Scientific grain storage and reasonable planning of grain sales time are important measures for smooth grain sale and prevention of bad grain.

Experts believe that in the long run, first of all, it is necessary to expand the ability of processing and transformation. We will increase support for the development of animal husbandry and aquaculture and speed up grain digestion. Efforts should be made to increase the effective supply of grain intensive processing products needed in the chemical industry, medicine, health care and other fields, and gradually make up for the shortcomings; secondly, strengthen the construction of the modern logistics system of "transporting grain from the north to the south". We will speed up the construction of a number of grain receiving and distribution facilities, support the construction of a number of transit warehouses, special railway lines, and inland coastal terminals, and increase subsidies in grain transportation to the south, focusing on solving the problem of high logistics costs faced by "transporting grain from the north to the south." third, guide the structural reform on the agricultural supply side, appropriately reduce some structural surplus planting area of grain crops, and increase effective supply. At the same time, we will reduce the cost of agricultural production in various ways, enhance the international competitiveness of agricultural products, and adapt to the new situation of supply and demand of agricultural products and grain.