National corn inventory exceeds 200 billion kilograms, far above a reasonable level
Statistics show that the corn inventory held by various types of enterprises nationwide currently exceeds 200 billion kilograms, far exceeding a reasonable level, with the characteristics of a stage of supply exceeding demand being obvious. Some main producing areas have encountered the awkward situation of being unable to purchase, unable to store, and unable to sell, and even more so the "troubles after a bumper harvest" of being unable to afford fiscal subsidies.
Statistics show that the corn inventory held by various types of enterprises nationwide currently exceeds 200 billion kilograms, far exceeding a reasonable level, with the characteristics of a stage of supply exceeding demand being obvious. Some main producing areas have encountered the awkward situation of being unable to purchase, unable to store, and unable to sell, and even more so the “troubles after a bumper harvest” of being unable to afford fiscal subsidies. Faced with this predicament, the pace of reform of state subsidies toward the “separation of price and subsidy” is accelerating, and the positive role of the deep-processing industry in grain conversion will be further amplified.
Focus on expanding domestic and international markets
Recently, at the 8th International Corn Industry Conference held in Wuhan, Hubei, Hu Hengyang, inspector of the Department of Rural Economy of the National Development and Reform Commission, expounded the basic thinking behind the current grain price reform, making clear that on the basis of drawing on past experience with agricultural product price formation mechanisms and market regulation mechanisms, and on the premise of protecting farmers' interests, the role of the market mechanism will be better brought into play, the domestic and international markets will be utilized in a coordinated way, and a pilot “target price” policy separating the price form of agricultural products from government subsidies will be carried out, subsidizing farmers when prices are low and subsidizing consumers when prices are high, with corresponding adjustments to international trade and outbound investment policies, improvement of the reserve drawdown and replenishment regulation mechanism, adherence to differentiated regulation by variety and category, adherence to clarifying responsibilities and assigning responsibility at different levels, and adherence to piloting first and promoting after trial, so as to gradually establish and improve an agricultural product price and market regulation mechanism suited to our national conditions and the development requirements of the current stage.
Hu Hengyang stressed that national food security should be expanded to an international perspective, and that the focus of future policy is to do good work in both domestic and external resources. The import and export strategy for agricultural products should be actively adjusted, the import scale of major agricultural products should be reasonably determined, a diversified import strategy should be actively implemented, and in terms of market opening and access there should be greater pragmatism and flexibility, strengthening the combination of imports and reserves, strengthening inspection of imports of bulk agricultural products, and improving the import reporting system.
At the same time, domestically, signals of domestic demand should be released to the international market through various means, research and forecasting on foreign markets and price drivers should be strengthened, the forward-looking nature and stability of imports should be improved, the management of agricultural product imports and the trade encouragement management system should be improved, supervision of grain exports should be better grasped, and simple agreements should be signed with agricultural product exporting countries.
Adhere to the principle of market pricing
Wang Xiaohui, deputy director of the China National Grain and Oils Information Center, said at the meeting that the principle of market pricing must be firmly adhered to. Let the market play a decisive role in the process of resource allocation. But it must also be gradual, continuously advancing the share of marketization. The interest demands of all sides must be comprehensively considered. Differentiated implementation policies must be carried out to reduce farmers' excessive reliance on grain market prices for income growth. The current predicament faced by the corn market is the result of the combined effect of the economic situation and the grain situation, and is the squeezing effect of slowing economic growth and rapid output growth. The increase in inventory is a result of upstream production growth and slow downstream consumption.
Wang Xiaohui believes that in the next 5 years, grain will be in a new plateau period, supply exceeding demand will likely become long-term, and corn prices will also face long-term downward pressure. Our country should bring into play the positive role of the deep-processing industry in grain conversion and guide and expand consumption through various means.
Focus on expanding domestic and international markets
Recently, at the 8th International Corn Industry Conference held in Wuhan, Hubei, Hu Hengyang, inspector of the Department of Rural Economy of the National Development and Reform Commission, expounded the basic thinking behind the current grain price reform, making clear that on the basis of drawing on past experience with agricultural product price formation mechanisms and market regulation mechanisms, and on the premise of protecting farmers' interests, the role of the market mechanism will be better brought into play, the domestic and international markets will be utilized in a coordinated way, and a pilot “target price” policy separating the price form of agricultural products from government subsidies will be carried out, subsidizing farmers when prices are low and subsidizing consumers when prices are high, with corresponding adjustments to international trade and outbound investment policies, improvement of the reserve drawdown and replenishment regulation mechanism, adherence to differentiated regulation by variety and category, adherence to clarifying responsibilities and assigning responsibility at different levels, and adherence to piloting first and promoting after trial, so as to gradually establish and improve an agricultural product price and market regulation mechanism suited to our national conditions and the development requirements of the current stage.
Hu Hengyang stressed that national food security should be expanded to an international perspective, and that the focus of future policy is to do good work in both domestic and external resources. The import and export strategy for agricultural products should be actively adjusted, the import scale of major agricultural products should be reasonably determined, a diversified import strategy should be actively implemented, and in terms of market opening and access there should be greater pragmatism and flexibility, strengthening the combination of imports and reserves, strengthening inspection of imports of bulk agricultural products, and improving the import reporting system.
At the same time, domestically, signals of domestic demand should be released to the international market through various means, research and forecasting on foreign markets and price drivers should be strengthened, the forward-looking nature and stability of imports should be improved, the management of agricultural product imports and the trade encouragement management system should be improved, supervision of grain exports should be better grasped, and simple agreements should be signed with agricultural product exporting countries.
Adhere to the principle of market pricing
Wang Xiaohui, deputy director of the China National Grain and Oils Information Center, said at the meeting that the principle of market pricing must be firmly adhered to. Let the market play a decisive role in the process of resource allocation. But it must also be gradual, continuously advancing the share of marketization. The interest demands of all sides must be comprehensively considered. Differentiated implementation policies must be carried out to reduce farmers' excessive reliance on grain market prices for income growth. The current predicament faced by the corn market is the result of the combined effect of the economic situation and the grain situation, and is the squeezing effect of slowing economic growth and rapid output growth. The increase in inventory is a result of upstream production growth and slow downstream consumption.
Wang Xiaohui believes that in the next 5 years, grain will be in a new plateau period, supply exceeding demand will likely become long-term, and corn prices will also face long-term downward pressure. Our country should bring into play the positive role of the deep-processing industry in grain conversion and guide and expand consumption through various means.