China's Summer Grain Purchase and Sales Prosperous Quality | Production | China
Affected by continuous rainy weather, the yield and quality of summer grain have decreased compared to the previous year. How to do a good job in wheat procurement and ensure that the grains are returned to the warehouse has become a challenge faced by this summer's grain procurement. At present, various regions are carefully organizing market-oriented acquisitions and doing a good job of buying damaged wheat as a backup. The wheat market is showing a good situation of both purchase and sales.
Active entry of business entities into the market
Hao Haibo, a grain grower in Dongda Village, Xiwang Town, Baixiang County, Hebei Province, planted over 300 acres of land this year. Due to weather and other factors, the wheat yield per mu has decreased by about 200 kilograms compared to last year. Nowadays, the price of high-quality local wheat has increased from 1.47 yuan per kilogram at the beginning of its listing to over 1.59 yuan, while the price of regular wheat has increased from 1.37 yuan per kilogram to around 1.395 yuan. "I stored the wheat in the grain depot of Jinguyuan High Quality Wheat Professional Cooperative in Baixiang County, and prepared to settle the payment when the price was suitable," said Hao Haibo.
Reserve enterprises, flour enterprises, feed enterprises, and deep processing enterprises are about to enter the market to purchase and seize grain sources. Trading enterprises are actively purchasing and increasing inventory, and the market is showing a good situation of both purchase and sales. As of July 25th, various grain enterprises in the main production areas have cumulatively purchased over 38 million tons of wheat, completing about 60% of the expected peak season purchase volume.
"At present, the overall progress of wheat procurement is smooth, and the procurement progress is basically equivalent to the same period in recent years. The price of wheat procurement has remained stable with an increase, from an average of around 1.35 yuan per kilogram at the time of weighing to around 1.39 yuan, providing farmers with more guaranteed income from selling grain." The relevant person in charge of the National Grain and Material Reserve Bureau said.
In early June, China Grain Reserves Corporation fully launched the central reserve wheat rotation acquisition. Fang Xiao, Secretary of the Party Committee and General Manager of China Grain Reserves Zhumadian Direct Warehouse Co., Ltd., said that the acquisition of six storage areas in the jurisdiction started on June 6th and completed the acquisition task on July 8th. In order to complete the rotation acquisition task on time, with quality and quantity guaranteed, each warehouse area is equipped with one green channel, implementing 24-hour on-demand unloading.
At present, the whole country has entered a critical period of flood prevention. The relevant person in charge of the National Grain and Material Reserve Bureau stated that they will further strengthen the overall organization and coordination of summer grain procurement, strengthen services, and make every effort to ensure safe flood season and full collection of summer grain receivables.
Strict bottom line for damaged wheat procurement
Affected by the "rotten rain", the affected area of wheat in China is 27.9 million mu, with Henan Province accounting for 95% of the affected area. How to purchase and dispose of damaged wheat has received high attention from society.
Malt is not suitable for making flour, but it can be used for feed, as well as for brewing, making ethanol, and so on. For the purchase and disposal of damaged wheat in major production areas such as Henan and Anhui, we adhere to the two bottom lines of "farmers have a way out for selling grain" and "food safety". We must not only minimize the losses of grain farmers, but also strictly prevent excessive wheat from entering the food market.
In order to understand the problem of damaged wheat sales, Henan has introduced a policy of purchasing damaged wheat, adopting a combination of policy based and market-oriented acquisitions to provide a cover up for the damaged wheat. Actively supporting feed enterprises and deep processing enterprises to enter the market for acquisition, damaged wheat is welcomed by business entities.
The relevant person in charge of the Henan Grain and Material Reserve Bureau stated that for damaged wheat sold by farmers, various regions require designated storage points to conduct batch by batch inspection of food safety indicators in accordance with the principle of "one vehicle, one inspection". Among them, for wheat that meets the feed grain standards, organize targeted production and sales connections between feed grain enterprises inside and outside the province and relevant storage points; For wheat that meets industrial grain standards, actively connect with large non edible industrial grain enterprises inside and outside the province, and implement targeted sales.
The relevant person in charge of the Anhui Provincial Grain and Material Reserve Bureau stated that a temporary collection and storage mechanism at the provincial, municipal, and county levels should be established, market price monitoring should be strengthened, and a "daily report" system should be implemented to timely grasp the quantity, distribution, and market price situation of imperfect wheat grains exceeding the standard, such as sprouting and sprouting.
Solid supply and demand fundamentals
Cross regional procurement has become a major highlight of summer grain procurement. In order to complete the rotation and planned acquisition tasks on time, Henan reserve and flour enterprises have relatively high listing prices when opening scales. Some even go to Anhui, Jiangsu, Shandong, Hebei and other regions for cross regional procurement. Feed enterprises and deep processing enterprises also cross regional procurement of damaged wheat with high cost-effectiveness, driving up wheat prices.
This year's wheat production and quality have decreased compared to last year, but the impact on the grain market is not significant. The relevant person in charge of the State Administration of Grain and Material Reserves stated that wheat in China is mainly used as a staple food, with relatively stable consumption and a surplus balance between production and demand throughout the year. The self-sufficiency rate exceeds 100%. This year, China has achieved another bumper harvest of summer grain, with wheat production remaining at around 135 million tons. The wheat inventory is abundant and the reserve is sufficient, and the material foundation for regulation is very solid.
"Based on the analysis of the annual supply-demand balance of wheat, it is expected that China's wheat will continue to show a pattern of oversupply in 2023/24," said Shen Hongyuan, Minister of Research and Prediction Department of Zhengzhou Grain Wholesale Market. This year's wheat production is 134.53 million tons, and it is expected that wheat imports will remain around 10 million tons in 2023/24.
Shen Hongyuan believes that from the perspective of purchase and sales, the market supply and demand present a situation of "centralized acquisition+decentralized supply". June is the peak period for wheat procurement, and enterprises such as reserve rotation, flour processing, and feed breeding carry out procurement and warehouse construction, making wheat prices easy to rise but difficult to fall. Currently, more than half of the wheat purchases have been made, and market purchases and sales are gradually entering a plateau period. In the second half of the year, with the continuous improvement of the macroeconomic situation, consumer demand is expected to steadily recover, but the supply and demand fundamentals are solid, and the wheat market can maintain stable operation.
