Is there still a protective price for early rice in 2018?
The rice market support policy for 2018 has not yet been announced, so it is still hard to say. The news currently circulating online about canceling the early indica rice market support in 2018 is only a suggestion from some experts and does not represent national policy.
The whole story is as follows--
In August, at the 18th China Grain Forum, co-hosted by the China National Association of Grain Sector, COFCO Corporation, China Grain Reserves Corporation, the Zhengzhou ( agricultural land, commercial and residential land, industrial land) grain wholesale market, the Zhengzhou Commodity Exchange, and the Dalian ( agricultural land, commercial and residential land, industrial land) Commodity Exchange, and organized by Hunan ( agricultural land, commercial and residential land, industrial land) Grain Group Co., Ltd.,
Cheng Guoqiang, a researcher at the Development Research Center of the State Council, suggested in his report on "Several Issues in the Reform of the Grain Purchase and Storage System": prepare for adjusting the minimum purchase price of wheat in 2018, lowering the minimum purchase price by 0.03 yuan/jin to 1.15 yuan/jin. From 2018 onward, suspend the implementation of the minimum purchase price policy for early indica rice, lower the minimum purchase price of japonica rice by another 0.1 yuan to 1.4 yuan; lower the minimum purchase price of middle and late indica rice by another 0.06 yuan/jin to 1.3 yuan/jin; and in 2019, further lower the price level based on a comprehensive consideration of indica rice price adjustments and the overall grain supply and demand situation.
Subsequently, in October, the 2018 wheat market support price announced by the National Development and Reform Commission was exactly consistent with Dr. Cheng Guoqiang's prediction, so this suggestion was recently brought up again, and some self-media outlets that did not understand the real situation directly reported it as the state canceling the 2018 early rice market support.
Therefore, the specific policy still needs to wait for the state's policy announcement.
In addition, from a personal understanding, although the policy has not yet been announced, many things are not entirely groundless. Since experts have made such a suggestion, the possibility of cancellation next year should be relatively high.
In fact, under China's market support policy for many consecutive years, China's grain inventory has been rising year after year; correspondingly, grain imports have also been continuously increasing, while at the same time the gap in the high-end grain and oil consumption sector has been growing day by day. Although the state has gradually strengthened control over grain quality during procurement and changed the previous practice of mixed purchasing, the results have not been obvious. "Emphasizing quantity over quality" in grain production has become an iron fence restricting the upgrading of China's grain industry, and large amounts of grain cannot be smoothly released from warehouses, gradually turning from new grain into old grain.
Data from the industry institution Zhuochuang Information shows that as of August 2017, China's total rice inventory in grain depots reached more than 120 million tons, and the pattern of supply exceeding demand was relatively obvious. In the minimum purchase price of rice announced by the state in 2017, the early indica rice had already been lowered for two consecutive years, and middle and late rice were also lowered for the first time since the policy was implemented fourteen years earlier. The general trend of rice destocking can no longer be changed.