Slow progress in purchasing newly harvested wheat, market demand is sluggish
“Who dares to rush and buy now? Small traders who purchased farmers' wheat earlier would be lucky just to sell it off smoothly.” Xi Yuecun, a wheat trader in Zhumadian, Henan, told reporters.
It is understood that this year during the wheat harvest season, rainy weather occurred in Jiangsu, Hubei, Anhui, southern Henan and other places, which caused sprouted wheat to appear among the newly harvested wheat in some areas, and the proportion of sprouted wheat reached 15%-20%. In previous years, after encountering the phenomenon of large amounts of sprouted wheat in the new wheat crop, in order to stabilize market prices, relevant departments would promptly introduce policies to relax purchasing standards and guide grain departments to actively purchase. This year, after large quantities of new wheat came onto the market, although the purchasing progress was relatively slow, relevant departments did not introduce related policies.
Xi Yuecun said that apart from the slow purchasing progress of newly harvested wheat with excessive imperfect grains, the purchase volume of wheat meeting the government's prescribed purchasing standards was also much lower than in previous years.
“At present, in many areas of Jiangsu, the purchase price of newly harvested wheat offered by small traders is only 1.15-1.16 yuan/jin, generally lower than the purchase prices in Henan, Hebei and other places, which is mainly caused by the smaller number of local buyers.” Qiang Sheng, a grain and oil trader in Nanjing, Jiangsu, believes that since newly harvested wheat came onto the market this year, all market participants have maintained a cautious attitude toward entering the market. In the market, apart from companies in the China Grain Reserves system and their entrusted depots purchasing actively, other market participants have been purchasing while watching, and some market participants are purchasing based on sales. The phenomenon of previous years, when all market participants regardless of the quality of newly harvested wheat first grabbed grain and then sold it, is gone.
Judging from the current market purchase prices in China's main wheat-producing areas, purchase prices in southern producing areas such as Jiangsu, Hubei and Anhui are somewhat lower, with the purchase price of newly harvested wheat at grain depots in most areas at 1.20-1.21 yuan/jin, while purchase prices in northern producing areas such as northern Henan, Shandong and Hebei are a bit higher, with the current mainstream market price at 1.21-1.22 yuan/jin.
According to Qiang Sheng, there are many reasons for the slow purchasing progress of newly harvested wheat this year. First, the minimum purchase price policy is strictly implemented according to the standards stipulated by policy, and newly harvested wheat is required to be winnowed and sieved when entering storage, while many newly harvested wheat lots in southern producing areas exceed the standard for imperfect grains. Second, warehouse capacity is limited in various places, and the phenomenon of bidding up prices to rush purchases has not appeared, so the purchasing progress of newly harvested wheat has naturally slowed considerably. Third, after newly harvested wheat came onto the market, rainy weather continued in various places, which also affected farmers' grain sales and grain depot purchases.
Some industry insiders told reporters that not only has the government-led purchasing progress of newly harvested wheat slowed compared with previous years, but the purchasing progress of other market participants has been even slower. Due to limited funds and poor product sales, many flour milling enterprises this year have been purchasing while processing, and because they are not optimistic about the future market, many flour milling enterprises have abandoned plans to make large purchases and stockpile when large quantities of newly harvested wheat come onto the market at low prices. According to reporters' understanding, the ex-factory price of bran at some small flour milling enterprises in Cangzhou, Hebei and other places has fallen to 0.5 yuan/jin, and many small and medium-sized flour milling enterprises are struggling to survive.
Li Zhiyong, business manager of the Xinxiang North Station Grain Depot in Henan, believes that the domestic wheat market clearly has a pattern of supply exceeding demand. Under such circumstances, the possibility of profiting in the future by purchasing and stockpiling newly harvested wheat is not great, and market purchasing demand for newly harvested wheat will certainly not be strong.