External factors cause prices to surge

External factors cause prices to surge

“Affected by many factors such as international geopolitics and the domestic epidemic, domestic corn prices rose in the first quarter, with obvious periodic and regional characteristics. The price increase of corn in production areas exceeded that in sales areas, and insufficient consumption caused prices in production and sales areas to be inverted. But this round of increases is not caused by the demand side but caused by external factors, and the impact of the current external market is still continuing, and it is necessary to continue to pay attention to the impact of the international market and domestic futures price fluctuations on the domestic spot.” said Liu Shilei, corn analyst at the National Grain and Oil Information Center.

Ukraine is a major corn producer and exporter in the world, and one of the important sources of my country’s corn imports. My country’s corn imports from Ukraine have been increasing, from 1.82 million tons in 2017 to 8.24 million tons in 2021, an increase of 4.5 times. At present, the conflict between Russia and Ukraine is still ongoing, and Ukraine’s spring plowing production has been affected, which may have an impact on my country’s corn imports, but the impact is limited.

My country is a major producer, consumer, and importer of corn. With the rapid recovery and development of the breeding industry, domestic corn consumption has grown rapidly, and there is a gap between production and demand, which needs to be adjusted through imports. In order to avoid potential import safety hazards caused by the high concentration of corn import sources and imported varieties, my country has continued to expand the sources of corn imports and increased the import of corn and its substitutes, barley, and sorghum, through multiple channels.

According to data from the General Administration of Customs, my country will import 50.25 million tons of corn and its substitutes sorghum and barley in 2021, a significant increase from 24.19 million tons in 2020. Among them, the cumulative imported corn was 28.35 million tons, a year-on-year increase of 152.2%. In the first quarter of this year, my country imported 7.1 million tons of corn, 2.59 million tons of sorghum, 1.72 million tons of barley, and 3.05 million tons of wheat. The total import volume of the four major cereals was 14.46 million tons, a slight increase of 3% year-on-year.

The price of corn keeps rising, the price ratio between rice and corn has changed, and the possibility of rice replacing corn as feed increases. In 2021, my country will import more than 2.5 million tons of broken rice, accounting for 51% of total imports. The total import of rice in the first quarter of this year was 1.66 million tons, including 842,000 tons of broken rice. Imported broken rice is mainly used to replace corn as feed, and a small part is used for food processing and alcohol production.

Shen Hongyuan, director of the Forecast Department of Zhengzhou Grain Wholesale Market, believes that from a global perspective, corn supply and demand remain stable and moderately loose, and corn production, total consumption and ending stocks have increased year-on-year to varying degrees. However, the conflict between Russia and Ukraine has led to rising crude oil prices, rising fertilizer prices, damage to the global corn supply chain, and a decline in corn production between Russia and Ukraine. International sea and land transportation costs, corn planting costs, and corn price formation mechanisms have also been affected. Global corn prices have risen sharply. Raise the cost of corn imports in my country and limit the intensity of import procurement. According to the latest data released by the customs, driven by rising prices, the amount of my country’s grain imports in the first quarter of this year increased by 20% year-on-year.

Enhance domestic supply stability

The demand for corn in my country is large, and there are many variables in the international market. It must be based on the domestic market to ensure stable and increased corn production. Last year, my country’s corn output reached 270 million tons, a year-on-year increase of 4.56%, a record high, and the shortage of corn supply and demand has improved. “This year, my country has adjusted its corn production target from last year’s ‘increase’ to ‘stable’. All localities have pushed forward the compound planting model of soybean and corn strips. At the same time, the corn area in the northwest and southwest production areas has been expanded, which has become an important guarantee for stabilizing the corn area.” Liu Shilei said.

There are two ways to ensure stable and increased corn production, one is to increase the sown area, and the other is to increase the unit yield. Shen Hongyuan believes that my country’s arable land resources are limited. On the basis of ensuring that the corn planting area in the early stage is implemented, it is necessary to expand soybeans and oil crops this year. It is unrealistic to increase the corn yield by increasing the planting area. To increase production. My country’s corn yield per unit has increased from 313 kg/mu in 2001 to 421 kg/mu in 2020. The contribution of corn breeding to the unit yield level accounts for more than 45%, but the corn yield level is still lower than the world’s advanced level.

To achieve a sustained increase in corn production, the core is to increase the yield per unit. It is necessary to increase the research and development of corn breeding to solve the problem of “stuck neck”. This year, the country will increase the promotion of biological corn to increase the yield per unit of corn. It is expected that the corn output is expected to reach a new high. In the long run, my country’s corn supply and demand are still in a tight balance. Liu Shilei believes that it is necessary to seize the two keys of arable land and seeds to improve the comprehensive production capacity of corn.

At present, spring ploughing production is steadily advancing from south to north. Shen Hongyuan believes that the sharp rise in corn prices this year has motivated farmers to plant corn. However, the price of agricultural materials such as fertilizers has risen sharply, which has raised the cost of corn planting and squeezed the income space for farmers to grow corn. This year, the state has implemented policies to ensure the supply and price of agricultural materials, such as the distribution of agricultural materials subsidies, the release of reserve chemical fertilizers, and the opening of green channels for agricultural materials, to reduce farmers’ planting costs and stabilize farmers’ enthusiasm for planting.