Rice prices rise as farmers hold back sales, experts predict prices will continue to rise later
Beijing, December 7 (CNR News, reporter Yang Ying) According to a report by China Rural Voice's "San Nong Zhongguo," rice harvesting has now nearly wrapped up across the country, and grain depots are beginning to see a peak in rice purchasing. Affected by weather, overall rice production declined this year, but high-quality rice prices have risen as a result.
Recently, grain broker Chen Guiping from Jiangyan District, Taizhou City, Jiangsu Province, brought rice samples to the Taizhou National Grain Reserve Depot for testing and grading. Chen Guiping said that if the tests pass, he will sell nearly five hundred tons of rice in his hands to the grain depot over the next few days.
Grain broker Chen Guiping: This year it was just like wheat, hit by natural disasters. The grade may be a bit lower than usual. But overall it's still okay, the yield is decent. If the price is set at a medium level, that's still fine too; as for income, I figure farmers should at least be able to break even.
Yin Weimin, a rice grower in Taixing County, planted 2 mu of rice this year, with a yield of less than a thousand jin per mu. He did the math for the reporter: based on the current market price of 1.55 yuan for rice, after deducting the planting cost of 600 yuan per mu and not counting labor costs, he just breaks even; counting labor costs, he is operating at a loss.
Yin Weimin: Up to now, two-tenths still hasn't been harvested. This year the yield per mu is less than a thousand jin, last year it was 1,400 jin. Not counting labor, seeds cost over forty yuan per mu, fertilizer and pesticides cost several hundred, and one mu of land costs no less than 600 yuan. The price now is 1.55 yuan, and I haven't sold my grain yet, I'm waiting to see. Because rice production has dropped this year, prices may be higher later on. Last year the highest price reached 1.57. Right now I can break even, but counting labor I'd be losing money.
Currently, China is in the peak period when the new season's rice hits the market in concentrated volumes, and rice harvesting has basically ended in all regions, ushering in the rice boom season of the year. Zhuochan Information market analyst Chen Xiaoshan told reporters that driven by the state's market-support purchasing and minimum protective price policies, rice prices nationwide have risen to relatively high levels. By December, rice supplies in various regions are gradually tightening, farmers' reluctance to sell is growing, and rice prices overall show a trend of steady increase.
Chen Xiaoshan: 2016 can be called a year of natural disasters, causing rice production declines, quality drops, and high moisture content in many places, while also creating different trends in this year's rice market. On one hand, the production decline has caused a shortage of high-quality rice supply, and high-quality rice prices have risen sharply. On the other hand, excessively high moisture makes it harder to store high-moisture grain, suppressing the upside room for high-moisture and low-quality rice. Overall, this year China faces a shortage of high-quality rice and low-moisture unhusked rice as raw grain, and prices are generally still relatively high.
Industry insiders analyzed that domestic rice prices have already risen to high levels, and the room for further increases is relatively limited. However, supported by the state's market-support policies, prices are predicted to only rise and not fall before the end of the year, with relatively small risk. Meanwhile, demand in the rice market is weak, and prices overall will find it hard to rise, remaining mainly stable. In view of growers' current reluctance to sell, it is recommended that growers choose to sell before the Spring Festival.
Chen Xiaoshan: With market grain supplies tight and prices relatively high, it is normal for growers to be reluctant to sell. Before the end of the year is still the peak season for rice sales, and rice mills and grain depots both have very large demand. It should be said that before the Spring Festival is a good opportunity to sell grain, and it is recommended that growers choose this sales peak season to sell. Because rice moisture content is relatively high in many parts of the country this year and storage is harder, it is not recommended that growers hold excessive inventory, in order to guard against possible price decline risks after the New Year.