Abstract: August 28th - farming upcoming harvest period, is expected to Chinese for 11 consecutive years of bumper harvest. But according to "the Wall Street journal" analysis, the official long-term acquisition policy has made food prices extremely distorted, and even the international price of 3 times the price, the harvest but produce more problems.

August 28th - the farming upcoming harvest period, is expected to Chinese for 11 consecutive years of bumper harvest. But according to "the Wall Street journal" analysis, the official long-term acquisition policy has made food prices extremely distorted, and even the international price of 3 times the price, the harvest but produce more problems.

China official estimates, 2014, grain reserves will reach 150 million tons, including rice, corn, three major crops, far higher than the 75 million tons in 2013. This will exacerbate the oversupply of agricultural commodities, while the excess supply is making prices under pressure.

Chinese has experienced severe famine, food surplus is worthy of pride, but inefficient and costly government purchase system, causing prices seriously distorted. 25, corn futures in Dalian commodity exchange closed at RMB 2390 yuan per ton, the Chicago Mercantile Exchange, the price of corn is about $3.67 per bushel, or about RMB 890 yuan per ton.

Source: "the Wall Street journal"

Official data show that over the years, the government often acquired at least 1/3 of corn production. The official media estimates, over the past two years the market price break at the end, the government acquired a 220 billion yuan popcorn.

At the same time, the mainland how to deal with huge inventory is also a problem. (Economics Capital) in London Economic Analyst Pugh Thomas said that China corn stocks accounted for about 40% of the world. Corn 70% is used to raise cattle, and the rest is processed into syrup or starch.

Food surplus serious problem

This year food surplus is especially a headache, because the rapid growth of the United States crop production makes local prices fell to nearly 4 year low. Huang Jikun, director of the agricultural policy research center of the Chinese Academy of Sciences, said the spread is encouraging traders to import corn from overseas, rather than the price has been at a high level of domestic corn.

China National Food Bureau website news, Premier Li Keqiang said, in the past requires a wide area of grain, accumulate good grain, good grain, but also reform the mechanism, so that buy into, save well, sell.

In early 2014, China began to reform and the acquisition system, to target price subsidies pilot. Measures, the government will no longer in order to maintain the price at a specified level and from the market to buy agricultural products, but in the market price lower than the target price subsidies.

The United States Department of agriculture economist Fred Gale said, Heilongjiang province corn auction China government recently held the poor, only 1/5 of the corn sold price 2200 yuan per ton, is two times more than the United States currently pay for feed mills corn prices.

China and the United States in the same year in excess of food supply

The United States Department of agriculture expects U.S. corn crop this year will reach a record 14 billion bushels. Kansas City, Missouri Central States Commodities Inc agency. Chairman Jason Britt said, corn futures have fallen by 15% this year, fell 40% last year, Chinese reluctant to buy U.S. corn corn prices will make further pressure.

Britt said that the lack of procurement from China is one of the reasons leading to the decline in corn prices, and now the market is going to do is to be able to draw the price level of demand.

In January this year, the government said China will start for cotton and soybean target price subsidies pilot end storage policy, the pilot will first start from cotton and soybean northeast of Xinjiang, in order to better play a decisive role in the market formed in the prices of agricultural products. Strategically, the importance of cotton and soybeans is slightly lower.

According to the pilot approach, the government will no longer be to maintain the price at a specific level to buy agricultural products from the market, but when the market price is lower than the target price subsidies. The establishment of the target price of agricultural products is to better play a decisive role in the market formed in the prices of agricultural products, which should in turn affect farmers plan.

In addition, since the end of last year, China has invested 10 million tons of reserve cotton, which means that the next few years, China imports of cotton demand may decline. This brings a heavy blow to the price of cotton. America cotton futures have fallen by more than 20% this year.