Grain outbound shipments expected to accelerate, tight state reserve warehouse capacity awaits relief
A Futures Daily reporter recently learned from the State Administration of Grain that relevant departments have decided to entrust the Anhui Grain Wholesale Market and others to hold a special national policy grain competitive bidding fair on January 6-8 next year. The varieties and quantities traded are 2 million tons of wheat, 4 million tons of japonica rice, 4 million tons of indica rice, and 5 million tons of corn.
It is understood that, unlike the regular weekly national policy grain competitive sales fairs, this special national policy grain competitive bidding fair has made some special provisions: first, the qualifications for participants have been relaxed; second, the quantity that participants may purchase has been increased; third, specific payment and delivery times have been stipulated.
According to the provisions, the buyers participating in the competitive bidding are enterprises that meet the conditions stipulated in the current relevant rules for policy grain trading or enterprises submitted by relevant departments for this special competitive bidding fair. The quantity of wheat purchased by buyers at this special fair is not subject to the restrictions in the wheat trading rules regarding wheat daily processing capacity. The maximum quantity of grain each buyer may bid for is: wheat not exceeding 100,000 tons, japonica rice not exceeding 200,000 tons, indica rice not exceeding 200,000 tons, and corn not exceeding 200,000 tons. For japonica rice, the delivery period for each concluded contract is before April 30 next year (including the 30th, the same below), and the payment deadline is before March 15 next year; for corn, the delivery period is before May 31 next year, and the payment deadline is before April 15 next year; for wheat and indica rice, the delivery period and payment deadline for each concluded contract shall be implemented in accordance with the relevant provisions of the trading rules.
"Before the Spring Festival, there is basically no chance for domestic wheat, corn, and rice prices to rise, and the large outflow of state reserve grain will increase the pressure on market supply." Li Weidong, a grain and oil trader in Nanjing, told a Futures Daily reporter that the simultaneous increase in outbound shipments of the three major state reserve grain varieties had never occurred before. The government's choice to sell off when the markets for all three major grain varieties are in a pure sales period shows, on the one hand, that state reserve grain stocks are huge and urgently need to be disposed of, and on the other hand, that grain enterprises in various regions are all very tight on warehouse capacity, and selling off now is also to free up warehouse capacity for new grain coming to market next year.
Zhou Dasen, a corn purchaser in Hebei, believes that this year the government did not issue a policy of giving freight subsidies to grain-using enterprises in the southern region for purchasing northeast corn, and relying only on the minimum purchase price policy still cannot completely solve the problem of unsold northeast corn. This special auction of 5 million tons of northeast-produced corn is intended to promote the sale of northeast corn outside the region, and at the same time the government also wants to achieve the goal of "pushing out the old and storing the new."
The reporter also learned through market research that, as of now, the quantities of state reserve rice and corn are very large, and although the quantity of state reserve wheat has declined somewhat, a considerable portion of the stored wheat is of poor quality and difficult to sell.
It is understood that, in order to increase the transaction rate of this fair, relevant departments have also introduced some incentive measures, such as buyers participating in the wheat competitive bidding being able to obtain, after purchasing, the next year's wheat import quota that is currently in urgent demand in the market.