The head of the price division of the National Development and Reform Commission said: China has the ability to maintain food prices

In recent days, major wheat exporters such as Russia have experienced severe drought, and wheat prices in the international market have risen sharply. Will the price of food in the domestic market be affected by the trend of grain prices in the international market? How is the domestic food price situation? With these questions, the reporter recently conducted a special interview with the relevant person in charge of the National Development and Reform Commission's Price Division. The price rise will not significantly impact the domestic market. The person in charge said that we have noticed the recent sharp rise in wheat prices in the international market and are also very concerned about the impact of rising international food prices on our country. From the perspective of the prices of major domestic and international grain varieties, the grain prices in the international market are currently substantially lower than the domestic market. Even if the international market experiences a large increase in the price of wheat, it will not cause any significant impact on prices in the domestic market. In the first half of this year, the Chicago market wheat, corn futures prices and Thai rice spot FOB price (FOB) were US$177 per ton, US$143 and US$496, respectively, which were 133%, 72%, and 128% lower than the same period of last year. In June, the spot prices of wheat, corn and rice in the international market were lower by 880 yuan, 1060 yuan and 660 yuan per ton respectively than the domestic wholesale price. However, due to factors such as continued drought in Russia, Ukraine, and Kazakhstan, the market expects that global wheat production will decline, leading to a sharp rise in international wheat prices in July. In addition, the market is concerned that the high temperature weather in the main agricultural areas of Europe and the United States may cause corn and soybean production to decline, and corn and soybean prices will also increase. The wheat, corn, and soybean futures prices recently delivered in the Chicago market were US$207, US$148, US$371 per ton, up by 256%, 81%, and 64% respectively from the previous month. The person in charge said that due to factors such as stable market demand and adequate inventory, rice prices in the international market have declined. Compared with the beginning of July, the current FOB price of Thai rice fell by about 4%. According to the National Development and Reform Commission, in July, the domestic wholesale prices of wheat, corn and soybeans were 695 yuan, 1005 yuan and 813 yuan per ton higher than the international market (US, Brazil spot price); the domestic wholesale price of late glutinous rice was closer than the quality Vietnam rice (including broken 5%, spot FOB price) is 692 yuan per ton higher; the wholesale price of domestic glutinous rice is 695 yuan per ton higher than Thai rice (including broken 10%, spot FOB price) of similar quality. International food prices will not rise sharply. The responsible person said that this round of grain price increases was mainly caused by the recent increase in market speculation and speculation. Although some wheat-producing countries have reduced production due to disasters, global wheat production and demand can still maintain a basic balance, and the level of inventories is high. In addition, corn, soybeans, and rice continue to exceed the supply pattern, with the recent disappearance of market speculation factors. The price level may return to the fundamentals of supply and demand. The National Development and Reform Commission believes that the current balance of grain supply and demand in the international market does not have the basis for substantial price increases. At present, the grain prices in the international market are much lower than those before the financial crisis in 2008. This time, the price increase is a recovery price increase. The person in charge quoted the US Department of Agriculture’s report in July saying that except for a slight gap in wheat production and demand that year, there was ample shortage of corn, rice, and soybeans, and supply was in excess of demand. From 2010 to 2011, the global wheat production was 66.1 billion tons, the demand was 66.7 billion tons, the production and demand gap was about 60.6 billion tons, the inventory was 18.7 billion tons, and the stock consumption ratio was 28%, which was higher than the normal level. Currently, global corn, rice, and soybeans have a balance between supply and demand, with a slight surplus. From 2010 to 2011, the global corn production was 83.2 billion tons, the demand was 83.1 billion tons, and the inventory was 14.1 billion tons; the rice output was 45.9 billion tons, the demand was 45.2 billion tons, the inventory was 97.7 billion tons; the soybean production was 25.1 billion tons, the demand was 24.8 billion tons , Inventory of 68.8 billion tons. The person in charge said, “We have noticed that the recent wheat futures prices have started to fall. Compared with the beginning of July, wheat prices in the Chicago futures market rose by about 60% on August 5; It fell 12% on August 10th compared with August 5. This also shows from one aspect that international food prices do not have the possibility of continuous and substantial increase,” said the person in charge. The person in charge of domestic food price changes that is basically not affected by the international report said that the domestic and foreign food market prices are less relevant. The production and demand of wheat, corn and rice in China are basically balanced. The import volume is very small, less than 1% of the total domestic grain output. Major grain varieties can be self-sufficient, and domestic grain price changes are basically not affected by the international market. He said that in the first half of 2007-2008, the price of grain in the international market continued to rise sharply. The price of wheat and corn rose by a maximum of about one time. The price of rice rose by a factor of two. The price of domestic wheat, corn and rice increased by 9% during the same period. 21% and 14%. In the second half of 2008, the price of grain in the international market fell sharply. At the end of the year, the prices of wheat, corn and rice all fell by about half from the highest prices in the first half of the year. In addition, the domestic grain prices remained basically stable except for corn, which rose steadily. In January 2009 and July 2008, domestic prices of wheat, corn and rice rose by 4%, -16% and 2% respectively.

He said that the supply and demand of the domestic food market is basically balanced, and all main grain varieties except soybeans can be self-sufficient, and the large fluctuations in grain prices in the international market have limited impact on the domestic market. In addition, in recent years, the national agricultural product price adjustment policy system has been gradually improved. The goal is to promote domestic food prices to rise steadily and slightly. This situation will not be interrupted by the impact of the international market. The basic balance between supply and demand will not change. The responsible person said that the pattern of basic balance between supply and demand in the grain market will not change in the second half of the year. However, it is necessary to pay close attention to extreme abnormalities in domestic climate conditions, frequent occurrence of agricultural disasters, and adverse effects on food production. We will implement the State Council’s recent policy on stabilizing autumn grain production, focus on stable grain production, and do a good job of preparations to prevent abnormal fluctuations in the grain market. According to preliminary statistics, the national autumn grain planting area has increased by more than 4 million mu over the previous year, but due to the impact of widespread low temperatures at the beginning of the year, delayed harvesting of summer grain and early rice, etc., autumn grain sowing has been generally postponed, and the climate conditions in the second half of the year have not been determined yet. Such early maturing varieties with relatively low yields may result in a decline in yield and quality, and there are some uncertainties in the autumn grain production that accounts for about two-thirds of the annual grain output. To this end, the state attaches great importance to stabilizing autumn grain production. On August 11, Premier Wen Jiabao presided over the executive meeting of the State Council to study and deploy a series of policies and measures to further support late rice and autumn grain production, such as disaster relief, fertilization, prevention of pests and diseases, and supply of agricultural capital seeds. The responsible person emphasized that in recent years, China’s food crops have been harvested year after year, stocks are abundant, and the stock-to-consumption ratio has reached more than 40%, far exceeding the internationally recognized level of safety of 17% to 18%. On the basis of the increase in grain production for six consecutive years, this summer's summer crops have achieved a good harvest, which is basically the same as last year; the wheat output has exceeded the previous year and has achieved a continuous increase for four years. In the second half of the year, we have the ability to continue to maintain the stability of grain prices and increase slightly, which will help stabilize the growth of farmers' income and lay a solid foundation for stabilizing future grain production.