The grain reform plan is coming soon, and we should be alert to the large fluctuation of grain price

Introduction: the import volume of soybeans, one of China's main agricultural products, set a new record again in 2003 According to the sources, the food reform plan will be announced at the latest before the purchase of this summer's grain, and is currently waiting for the approval of the State Council MYH "comprehensively liberalizes the grain purchase and sale market" and "establishes the direct subsidy system for farmers" In 2004, the central government's No Since October 2003, the domestic grain price has risen in an all-round way, including 25% increase in soybean price, 14% increase in corn price, 21% increase in wheat price and 10% increase in rice price The overall liberalization of grain purchase and sale prices means the complete end of the protection price and the complete marketization of grain prices What will be the impact on the new round of grain price increase starting from October last year? Cheng Guoqiang, a researcher at the development research center of the State Council who participated in the drafting of the No 1 document, said in an interview that "the price of grain is ultimately determined by market supply and demand, which has little to do with the liberalization of grain purchase and sale." However, some economists also pointed out that after the price of grain purchase and sale has been fully liberalized, the government should be alert to the occurrence of artificial hype which leads to a sharp rise in grain prices, thus increasing market instability and interfering with the operation of the macro-economy The liberalization of the MYH grain purchase and sale system will remind many people of the rising price wave of grain in 1993: under the background that grain production has basically met the demand, as the grain price rise caused by the transformation of the grain circulation system from the "dual track" system of ordering, control and negotiation to the "single track" system of market regulation, the final grain circulation will not return to the "dual track" system But the fundamental difference between the two deregulation is that before the deregulation of grain price in 1993, the government set the highest price, and the comprehensive factors such as the rise of fertilizer raw materials, psychological expectations, and the macro background of inflation led to the rapid rise of grain price MYH and this year's national grain reform is based on the basis that the total supply is greater than the total demand What's more, the grain price has been running at a low level in recent years, and the minimum protection price is set by the government, but in fact, the price of grain has always been higher than the minimum protection price, so the liberalization will not cause the rise of grain price However, we should not forget that the price rise of grain happened in 1993: under the background that the grain production has basically met the demand, the grain price rise caused by the reform of the grain circulation system from the "dual track" system of ordering, unified marketing and negotiation to the "single track" system of market regulation, at the end, the grain circulation does not return to the channel of the "dual track" system The gap between the production and demand of MYH supports the increase of grain price The four indicators are often the basic tools for analysts to predict the trend of grain price MYH simply put, if the inventory plus grain output plus imports is greater than the sum of consumption and exports, it means that supply is greater than demand, and grain prices should move downward According to the above formula, most analysts believe that China's grain production and marketing gap determines that grain prices will continue to rise in 2004 First of all, the area planted with grain is expected to increase, but it is a restorative growth This year, China's grain planting area is expected to increase by 24 million mu, but it is only a restorative increase, and the reduction of summer grain sown area has become a foregone conclusion Second, the demand for food has increased Since 1995, the average annual population growth of the whole country has been more than 8 ‰, which brings continuous demand pressure for food In addition, with the further development of the national economy and the upgrading of the consumption structure of residents, the demand for food will continue to grow in a rigid way Third, the grain inventory dropped significantly As China's grain production has been reduced for four consecutive years, the grain inventory has been reduced substantially continuously At the same time, the global grain inventory is also at the lowest level since 1996 The proportion of grain inventory in the current year's consumption has decreased from 20.4% in the past to 13.9% in October 2003, which is far lower than the food security cordon of 18.2% stipulated by the food and Agriculture Organization of the United Nations (FAO) MYH fourth, high international food prices According to the monitoring of the information center of the Ministry of agriculture, in December 2003, the spot price of grain in the international market mostly reached a high level, among which the prices of wheat, corn, rice and soybean all rose The decline in global production and inventories, as well as strong demand from China, have contributed to the rise in international food prices According to the data of the National Bureau of statistics, the total grain output last year was more than 860 billion jin, and the grain demand in the same period was about 970 billion jin The gap between food production and demand is nearly 10 billion Chen Xiwen, deputy director of the office of the central leading group for finance and economics of MYH, estimated at a press conference on February 9 that there would be a reasonable space for the price of agricultural products to rise The reason why MYH thinks it is "reasonable" is that the overall increase in food prices since October last year has not been significant In terms of the overall level of prices, it is actually lower than the level in 1996 Chen Xiwen pointed out that although there is a large gap between supply and demand of grain, China's total grain inventory is still at a relatively high level in history "Both the central rural work conference and the No 1 document of the Central Committee stressed the need to encourage and support the development of food production in major food producing areas," he said The Ministry of agriculture has put forward a plan to achieve a total grain output of 910 billion jin in 2004 It should be said that from this year on, the gap between production and demand of grain in that year will gradually narrow " Chen also stressed that "a reasonable recovery in the price of agricultural products will not exceed the affordability of ordinary residents Of course, this does not mean that the government can give up the regulation of important agricultural products " Analysts pointed out that the government would probably adjust the price of grain by selling grain reserves (stocks) to increase reserves and import and export In fact, the price of grain often reflects the psychological expectation of the market Although the domestic grain production has been reduced for four consecutive years, Cheng Guoqiang believes that the overall pattern of domestic grain supply exceeding demand has not changed The unreasonable distribution of grain inventory and the bottleneck of logistics and transportation are the main reasons for this round of grain price increase At present, 90% of China's grain stocks are concentrated in some major grain producing areas such as the north, while the grain stocks in the south are seriously insufficient At the end of 2003, with the shortage of raw material supply, the demand for large raw materials such as steel, non-ferrous metals, coal and so on started a battle for transportation capacity and resources, with high transportation costs The shipping cost from Dalian to Guangdong is up 120 yuan per ton The increase in freight accounted for 40% of the increase in corn prices According to this, Cheng Guoqiang put forward the view that "it is not the rising grain price that causes inflation in China, but the macroeconomic environment that drives the rising grain price" MYH With the state's macro-control over some overheated industries, the shortage of raw materials supply will tend to ease; in addition, with the availability of grain reserves in the southern warehouses, Cheng Guoqiang believes that the factors that cause the rise of grain prices will gradually weaken; in addition, in the long run, the various policies implemented in document 1 will protect the enthusiasm of farmers in grain production, so as to protect and improve grain production The comprehensive capacity of food production will be conducive to the stability of food prices.