Will food prices rise after many countries ban agricultural exports? Can agricultural stocks be bought? Experts say

Sino-Singapore Jingwei Client, April 2 (Wu Yihan intern Du Lunhui) Recently, many countries have announced a ban on agricultural exports, which has caused consumer concerns about rising agricultural prices and investor concerns about the agricultural sector.

From the perspective of industry insiders, China ’s staple foods have a relatively low dependence on the international market and have a solid foundation for price stability. Therefore, consumers do not need to worry about food security. From the perspective of the rise in the A-share agricultural sector, it may be a short-term Emotional hype.

Photograph by Xin Jingwei, Jia Yifu

Many countries ban agricultural products export attract netizens

According to incomplete statistics by China and Singapore, so far, six countries have banned or restricted grain exports.

On March 30, Cambodian Prime Minister Hun Sen stated that Cambodia will ban white rice and rice exports from April 5 except for fragrant rice.

On March 28, Egypt's Minister of Trade and Industry, Nevin Jamey, decided to stop exporting various legume products within the next three months from March 28. The Egyptian Ministry of Trade and Industry said the decision was aimed at guaranteeing demand for Egyptian goods, especially basic goods. This is part of the precautionary measures Egypt is taking to address the impact of the new crown pneumonia epidemic.

The official website of the Russian Ministry of Agriculture reported on March 27 that the Russian Ministry of Agriculture intends to set the export limit of Russian wheat, barley, corn and other agricultural products to 7 million tons from April 1 to June 30, 2020. The Russian Minister of Agriculture said that this set of measures aims to protect domestic demand and prevent the surge in prices of major crops and the rise in consumer prices in the final product industry.

On March 26, Thai Deputy Prime Minister Zhu Lin and Minister of Commerce announced that due to the new crown pneumonia epidemic, there was a shortage of eggs in Thailand, and Thailand announced a ban on egg exports for 7 days.

On March 24, Vietnam Customs announced that starting at 0:00 on March 24, various rice products were banned from being exported in any form. This means that Vietnam, China's first rice importer, has closed its export door to China.

Earlier, Kazakhstan decided to restrict exports of 11 agricultural products, including wheat, and Kazakhstan is one of the major exporters in the global wheat market. In addition, Serbia has also stopped exporting goods such as sunflower oil.

Data show that among the above mentioned countries, Vietnam, Kazakhstan and Egypt are the world's major food exporters, while Vietnam and Thailand are the top two countries for rice imports in China. Affected by the news that many countries have banned / restricted the export of agricultural products, many citizens in the country have also joined the ranks of buying rice.

"The night before yesterday, I bought 100 pounds of rice from Mipu deliberately. I saw in the news that several countries have begun to ban grain exports because of the epidemic, and I thought of the best rice in the country." From Dongyang City, Jinhua City, Zhejiang Province. Ms. Zhu from Ma Zhaizhen told reporters from China and Singapore on March 31, "At home, there were not many meters. In addition, due to the impact of the epidemic, there are more people eating at home than before, and rice is eating faster. I'm afraid that the price of rice will rise in the future, so I feel more comfortable buying a little more. "

Ms. Zhu said that when she bought rice, the owner of the rice shop told her that there were many people who bought rice the same night as her, and they all bought four or five bags. However, the price of rice has not increased significantly.

On Weibo, the topic of banning food exports in many countries around the world has also sparked heated discussions among netizens. Some netizens believe that China's food security need not be worried, and some netizens believe that rising food prices are not impossible, and netizens teased that I have to hurry home and farm these days.

Satan's Tail 1: Spring sowing time, it is okay that China has passed, and there is no impact on farming. Other countries with epidemic centers are estimated to be greatly affected. Food production and transportation have been greatly hindered. The Chinese have always been major importers of grain, oil, and meat. Just afraid to go up!

Spring Water Law Enforcement Officer: The professional profession is here. There is no need to worry about China's grain storage. There is no shortage of grain, so it has less rhythm.

Forget about love and regret medicine: China is not short of staple foods, but it will have a great impact on emotions. In the near future, there will definitely be a lot of people at home.

Past events follow the wind QD: Hurry back home these days to plant the plot.

Photograph by Xin Bo in a spring ploughing scene of a modern agricultural garden in Nanjing.

Experts: China's rations are absolutely safe, soy prices may rise

Wang Liaowei, a senior economist at the National Grain and Oil Information Center, pointed out to the media on March 28 that China ’s rice imports have been decreasing year by year. In 2019, rice imports were 2.55 million tons, a year-on-year decrease of 530,000 tons. Imported rice accounted for about 1% of China ’s rice consumption, even Imports will not affect domestic market supply. He said that China has achieved "basic self-sufficiency in grains and absolute security in rations". The overall supply and demand of grain is loose, which can fully meet the daily consumption needs of the people and can effectively respond to the test of major natural disasters and emergencies.

The Everbright Securities Xiaobo team stated that China's staple food has basically achieved self-sufficiency. First of all, China's total grain production is large, with total output exceeding 650 million tons for five consecutive years, of which cereals account for more than 92%. Secondly, staple foods are basically produced domestically, and the proportion of imports is very small. Soybeans are the main source of imported grains. China's annual grain imports exceed 100 million tons, and nearly 80% are soybeans, while imports of staple foods such as rice, wheat, and corn are only small. Million tons, accounting for about 1-2% of total domestic consumption. At present, China has more than 150 million tons of grain reserves, and the stocks of rations such as wheat and rice are at an all-time high.

However, as to whether the price of agricultural products will rise in the future, Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, said that China's rice, wheat and corn stocks are relatively high, the supply is sufficient, and the possibility of large price fluctuations is unlikely. "The three major staples have relatively low dependence on the international market, and there is a solid foundation for price stability."

Founder Securities pointed out that the price of different grains is different in sensitivity to foreign factors. The agency said that from the perspective of rice and wheat, China's imports are very low, and its annual output is basically stable. At present, China's rice and wheat are still facing the problem of high stocks. Therefore, the measures taken by many countries to ban grain exports have limited impact on China's rice and wheat prices.

In spite of the low import volume of corn, at present, China's new corn production has been insufficient for three consecutive years, there is a gap in production and sales, and there is a low inventory level. Therefore, the importance of imports for stabilizing corn prices has become stronger and prices have risen. expected. And China's soybeans mainly rely on imports. In 2019, China's soybean imports accounted for nearly 90% of consumption. The main importing countries were Argentina, Brazil, and the United States. If the subsequent epidemic continues to ferment, it may cause China's soybeans and related downstream products such as soybean meal and soybean oil. Further price increases.

As for the price of soybeans, Li Guoxiang believes that soybeans are highly dependent on the international market, and a short-term rise in imported soybean prices is possible. In the long run, China has more choices of soybean importing countries, and domestic soybeans still have a certain reserve, which can cushion the impact of rising international soybean prices to a certain extent.

Customs officers conduct sensory quarantine on soybeans exported to China Photo by Qu Yanlin, China News Agency

Agricultural sector is strong, or short-term emotional hype

After the news that many countries banned the export of agricultural products, the A-share agricultural sector also returned to the sight of the capital market. On March 31, the Wind agricultural index rose the highest in all sectors of the day, including the daily limit of more than 10 agricultural stocks, including Tianma Technology, Tangrenshen, New Hope, Aonong Bio, Yasheng Group, and Tianbang. On April 1, despite the correction of multiple shares in the sector, the overall increase in the agricultural sector this year still ranks second among all sectors, and the popular concept stock Jinjian Rice in the agricultural sector has already harvested on the 8th. 6 Daily limit.

According to Yin Yue of Yuekai Securities, with the continuous development of public health events, concerns about food security have been raised, and some countries have adopted some restrictions on food exports. As a result, the agricultural sector has been trending strongly recently.

Everbright Securities believes that the current epidemic has not significantly affected the global food supply, mainly due to disturbances in output reduction expectations, and the current restrictions on agricultural exports are mainly in countries where food supply is in short supply, and major food producing countries have not yet taken clear action.

However, the agency also pointed out that it is still necessary to pay close attention to the development of the epidemic, and April and May are the key points. On the one hand, the current critical season for spring planting in the northern hemisphere, the epidemic may cause shortage of labor; on the other hand, the epidemic will reduce the efficiency of global transportation and freight transportation, and production materials will be affected. At the same time, the weather in April-June is the key to affecting the further breeding of the African locust plague. If multiple factors overlap, the epidemic continues to ferment, and the African locust plague continues to expand, which will then threaten global food supply.

From the perspective of the agricultural sector, Yin Yue said that for our country, basic food self-sufficiency has been achieved, and there is no need to worry too much about food security. In the future, the agricultural sector as a defensive variety, after experiencing a decline in the first quarter, there is room to make up. (Zhongxin Jingwei APP)

(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky and you must be cautious when entering the market.)

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