The reduction in national purchases of wheat in the main summer grain-producing areas does not mean a reduction in production: active market farmers are reluctant to sell
The paper reporter Chen Lingyao
On August 12, the National Grain Reserve Bureau disclosed the progress of the purchase of summer grains in the main producing areas. The news that the cumulative purchase of wheat in the main producing areas decreased by nearly 10 million tons year-on-year attracted attention, and also triggered discussions on some food security issues.
With a bumper summer crop, why has the amount of wheat decreased? This kind of question is actually a misunderstanding of the above news. Production and purchase volume are two different things. The data currently released is the purchase situation in the hands of the National Grain Reserve Bureau. It is only part of the grain market and does not include food traders and small and medium-sized traders. And other market-oriented purchases and the inventory on hand of farmers.
Regarding the reduction in national purchases, industry insiders said that the wheat market this year is relatively good, market players are more enthusiastic about purchasing, and farmers in the main producing areas also have a bullish attitude toward sales. Part of it goes to the market and part of it remains in the hands of farmers, and the amount of policy-based purchases and reserves will decrease accordingly.
The wheat market is in good condition, and the price in many places is higher than the minimum purchase price
According to data from the National Grain Reserve Bureau, as of August 5, the cumulative purchase of wheat in the main producing areas was 42.857 million tons, a year-on-year decrease of 9.383 million tons. Specifically, Henan’s cumulative wheat purchase was 9.124 million tons, a year-on-year decrease of 5.388 million tons, the largest decline. Followed by Anhui, the province's purchase volume was 5.929 million tons, a year-on-year decrease of 2.224 million tons. The cumulative purchase of wheat in Hebei, Jiangsu, Shandong and other places also declined. The purchase of Hubei was 1.39 million tons, an increase of 68,000 tons over the same period last year.
Hu Bingbing, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, said in an interview with The Paper (www.thepaper.cn) that the country’s purchase of summer grains has decreased this year, mainly because the overall wheat market is better, and wheat prices in many places are higher than the lowest. The purchase price, policy-based purchases and reserves are relatively small, and the main body of the purchase has turned to the market. "Farmers are always on the market, and whoever pays the price is good. The minimum purchase price of third-class wheat announced by the state is 1.12 yuan/jin. If the price of the flour mill is higher, the farmer will sell it to the flour mill." Say.
Purchasing summer grain at the lowest purchase price in the main producing areas is a policy of benefiting and benefiting agriculture implemented by the state to ensure the interests of grain farmers. Hu Bingbing mentioned that the policy term for the lowest-price purchases is called “support market purchases”, which is to use the market as a base to prevent low grain prices from damaging farmers’ enthusiasm for growing grain. This policy has worked most of the time in previous years because the market price of grain is much lower than the national minimum purchase price.
According to data from Zhuochuang Information, in major producing areas such as Henan, Hebei, and Shandong, the mainstream price for the purchase of first-class wheat by flour mills has fluctuated between 1.2 yuan/jin and 1.4 yuan/jin, which is higher than the national minimum purchase price of 1.16 yuan/jin. jin. The agency's analyst Xu Xueping told The Paper (www.thepaper.cn) that after the launch of the new grain in June, the overall price was stronger than in previous years, showing a slow upward trend. Since August, the wheat rise has accelerated further.
According to his analysis, the recent increase in wheat prices has been affected by several factors. One is that wheat production has declined to a certain extent in some areas affected by unfavorable weather. In addition, the overall grain market trend is strong in the first half of this year, and the market is more optimistic about the later trend of wheat; August entered the peak season for flour demand, and manufacturers started high, which had a direct effect on wheat prices; third, the price of corn rose rapidly in July, surpassing the price of wheat, and the substitution of corn for wheat in feed increased, which objectively increased the demand for wheat. .
In addition to active market purchases and sales, farmers are also reluctant to sell under the current market conditions, and some brokers also have the desire to hoard. Hu Bingbing mentioned that some small and medium-sized farmers and brokers have the idea of waiting for the price. They think that the market outlook will be better, so they will store them for a period of time before selling. This is a game of interest between food traders and food farmers.
“The purpose of the policy for grain purchase and storage is to solve the problem of farmers’ difficulty in selling grain, but unlike previous years, this year’s grain is very good, mainly because farmers have a mentality of reluctance to sell.” Xu Xueping said that the reduction in national summer grain purchases is a passive reduction, which is exactly the same. The current strong market trend is directly related.
Henan: Wheat prices continue to rise, and some areas support the suspension of market purchases
The Paper reporter noted that some major wheat producing areas have responded to the purchase of summer grains. According to a report from Henan Daily on August 7th, the province’s purchase of support for the city started late this year. As wheat prices continue to rise, some areas have suspended the purchase of support for the city.
According to the relevant person in charge of the Henan Provincial Grain Storage Bureau, affected by the global new crown epidemic and the floods in the south, the reluctance to sell grain farmers and the idea of self-preservation and self-use coexist. At the initial stage of the new grain’s listing, many types of grain purchase market entities such as reserve grain rotation purchase companies and flour processing companies were more enthusiastic to enter the market. This centralized purchase boosted the price of wheat to a certain extent, causing the price of wheat in the early stage of the purchase to continue to be higher than the minimum. The purchase price did not meet the conditions for starting the plan. After July, the market's demand for wheat declined to a certain extent, and the price of wheat showed a slight downward trend. The price of wheat in some provinces and municipalities fell below the minimum purchase price. Since July 17, 11 provinces and cities have successively launched the minimum. Purchase price plan.
Regarding the suspension of purchases in certain areas, the above report cited the analysis of Shen Hongyuan, director of the Zhengzhou Grain Wholesale Market Research and Forecast Department, saying that the high domestic corn price since the second quarter has triggered feed companies to actively enter the market to buy wheat. Coupled with the impact of the new crown pneumonia epidemic, The grass-roots reluctance to sell is generally stronger than in previous years. Many grain-consuming companies have not reached the acquisition plan, and they have to increase prices or introduce incentive policies to stimulate grass-roots grain sales. At the same time, the price of maize is full of momentum, which in turn boosted the price of wheat. In addition to farming, alcohol and other other aspects have also expanded the demand for wheat. Coupled with the expansion of the scope of the support market, the price of wheat has increased momentum.
Statistics show that the total output of summer grain in Henan this year is 75.075 billion jin, an increase of 167 million jin over the previous year. Among them, the total wheat output was 75.063 billion catties, an increase of 0.3% over the previous year, accounting for more than 28% of the country's total wheat output, and it continued to maintain its leading position in the country.
The relevant person in charge of the Shandong Provincial Grain Storage Bureau also mentioned at the press conference in early June, “This year’s situation is particularly complicated. According to preliminary analysis, due to the impact of the new crown pneumonia epidemic, the farmers in the main producing areas may be reluctant to sell the new wheat in the initial stage of the market. , Self-existence and self-use thinking, the time for centralized acquisition may be relatively long."
According to data from the National Bureau of Statistics on July 15, the total output of summer grains nationwide this year reached 142.81 million tons, an increase of 1.208 million tons over 2019 and an increase of 0.9% year-on-year. Among them, wheat production was 131.68 million tons, an increase of 756,000 tons over 2019 and a year-on-year increase of 0.6%. The national summer grain production not only reaped another bumper harvest, but also the output hit a record high. Although the sown area of summer wheat has been slightly reduced this year, the increase in yields still supports its bumper harvest. The yield per unit area of wheat was 5798.0 kg/ha, an increase of 101.9 kg/ha over 2019 and a year-on-year increase of 1.8%.
Regarding the current food security situation, the head of the State Grain Reserve Bureau said in a recent interview with the media that China’s grain production capacity has been stable and the output has remained at a historically high level. It has achieved "16 consecutive harvests", and grain output has reached 1.3 trillion for 5 consecutive years. More than catty. In the medium and long term, China’s grain production and demand will remain tightly balanced. It is also necessary to continuously optimize the structure of reserve varieties, innovate and strengthen grain law enforcement and supervision, and ensure that the quantity, quality, mobilization, and use of national reserves of grain are real. Resolutely guard and manage the "granary of the world."