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How expensive is the food? Weather troubles, hot money troubles
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How expensive is the food? Weather troubles, hot money troubles

  • Categories:Industry News
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  • Time of issue:2018-04-24 17:35
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(Summary description)Recently, the stock prices of listed companies related to agricultural products have soared, and the average share price of the agriculture, forestry, fishery and animal husbandry sector has risen by 14% in half a month, far exceeding the market’s 8% in the same period. All this is caused by the bad weather. In the northern and southern hemispheres, many major grain-producing countries, including China, are being hit by extreme weather, which has intensified the expectations of the agricultural futures market for reduced grain production. In addition, the flood of international hot money has led to a large increase in the prices of agricultural products recently.   Food prices run faster than rabbits   In the futures market, on the first trading day after the beginning of the Year of the Rabbit, domestic agricultural product futures sprung up. On February 9th, ale futures soared all the way, daily limit

How expensive is the food? Weather troubles, hot money troubles

(Summary description)Recently, the stock prices of listed companies related to agricultural products have soared, and the average share price of the agriculture, forestry, fishery and animal husbandry sector has risen by 14% in half a month, far exceeding the market’s 8% in the same period. All this is caused by the bad weather. In the northern and southern hemispheres, many major grain-producing countries, including China, are being hit by extreme weather, which has intensified the expectations of the agricultural futures market for reduced grain production. In addition, the flood of international hot money has led to a large increase in the prices of agricultural products recently.   Food prices run faster than rabbits   In the futures market, on the first trading day after the beginning of the Year of the Rabbit, domestic agricultural product futures sprung up. On February 9th, ale futures soared all the way, daily limit

  • Categories:Industry News
  • Author:
  • Origin:
  • Time of issue:2018-04-24 17:35
  • Views:
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Recently, the stock prices of listed companies related to agricultural products have soared, and the average share price of the agriculture, forestry, fishery and animal husbandry sector has risen by 14% in half a month, far exceeding the market’s 8% in the same period. All this is caused by the bad weather. In the northern and southern hemispheres, many major grain-producing countries, including China, are being hit by extreme weather, which has intensified the expectations of the agricultural futures market for reduced grain production. In addition, the flood of international hot money has led to a large increase in the prices of agricultural products recently.

Food prices run faster than rabbits

In the futures market, domestic agricultural product futures sprang up on the first trading day after the start of the Year of the Rabbit. On February 9th, ale futures soared all the way, the daily limit of the day, closing at 3051 yuan per ton, on the 10th, ale futures rushed to the historical high of 3064 yuan per ton; driven by this, last year almost doubled Cotton futures also set a new high of 34,000 yuan per ton on the 9th, and sugar futures reached 7,575 yuan per ton on the 10th, setting a new historical record.

After a few days of rest, the varieties with higher-than-expected food prices continued to expand. On the Dalian Commodity Exchange, corn futures rose sharply yesterday. The main September 2011 corn contract closed at RMB 2,474 per ton, an increase of RMB 31 from the settlement price of the previous trading day, which also hit a new high.

The sharp rise in grain futures prices has forced grain companies to raise their purchase prices.

Affected by rising prices of agricultural products, food prices have risen significantly. Yesterday, the National Bureau of Statistics released the latest issue of "Average Price Changes in Major Foods in 50 Cities" (February 1-10). Among the 30 major food items, only 6 varieties have fallen or remained unchanged year-on-year, and 24 varieties The increase ranged from 0.2% to 10.1%.

Bad weather is the bane, hot money is an accomplice

From the perspective of supply, since July 2010, the world's major food producing countries have encountered abnormal weather, and the production of staple foods such as wheat has decreased, which has had a decisive impact on the increase in food prices. Last year, Russia suffered a drought that was unprecedented in a century, and subsequently issued a wheat export ban, which opened the prelude to the rapid rise in food prices. Afterwards, floods in Pakistan, severe cold in Northern Europe, blizzards in North America, floods in Australia and Brazil hit the grain production in the corresponding regions, and also contributed to market expectations of grain price increases.

In northern China, according to the Ministry of Agriculture’s agricultural situation control, 96.11 million mu of winter wheat in the eight provinces are currently affected by drought, accounting for 35.1% of the winter wheat planting area in the eight provinces and 21.7% of the arable land in the eight provinces. And output accounted for more than 80% of the country. If the drought continues, it will pose a serious threat to wheat production.

Affected by extreme weather, global food prices have repeatedly climbed to new highs. At the same time, working capital has also set its sights on the international bulk agricultural product market, with the intention of using extreme weather to speculate on food prices and benefit from it. Liang Yanfen, director of the World Economy and Trade Department of the Institute of the Ministry of Commerce, believes that excess liquidity has a great effect on pushing up the prices of international bulk agricultural products, leading to a large increase in food prices in a short period of time. "The current global food supply has not changed much compared to last year, but food prices have continued to rise. It can be seen that working capital has played a role in fueling the flames."

However, the role of extreme weather may be exaggerated. Qin Jun, an analyst at Guotai Junan, pointed out that although the southern hemisphere agricultural exporting countries have encountered extreme weather recently, the actual impact is not large from the point of view of the disaster area and the crop growth time node, but the impact of the disaster on market psychological expectations will cause recent agricultural product prices Produce fluctuations.

The pattern of long-term increase in agricultural product prices is difficult to change

Judging from the recent report issued by the US Department of Agriculture, global agricultural products are in a tight supply situation, especially soybeans, corn and cotton. From the perspective of the situation in the United States, the supply of corn in the United States was tight in 2011, the most in the past 15 years. Seriously, the supply of soybeans has reached the tightest level in 45 years. The price of the international market will directly affect the domestic varieties of agricultural products that rely on large amounts of imports.

In China, in the face of drought, Shandong, Henan, Anhui and other provinces have adopted drought-resistant and seedling protection measures. Although the drought has been alleviated, drought-resistant costs have also increased the cost of wheat planting and indirectly raised the price trend of wheat. Some experts pointed out that as far as the current situation is concerned, the reduction in wheat production this year is inevitable. The magnitude of the reduction depends on the later weather and artificial irrigation. Although the country will use various methods to stabilize wheat prices, it can only help. Temporarily restraining the effect of the rapid rise in wheat prices, in the face of the expected reduction in domestic supply, the rise in wheat prices is likely to continue.

Analysts of China Agricultural Products Trading Network believe that domestic inflation has evolved from the early currency over-circulation inflation to the current cost-driven inflation. In the recent period, the severe domestic drought has added worry to the supply of agricultural products in the later period. Rising prices are also inevitable. From this perspective, the long-term growth pattern of agricultural product prices is difficult to shake.

Agricultural products and related sectors are bullish

Morning News reporter Liu Chang

The Guosen Securities report believes that the experience of the past two consecutive years has shown that there is a wave of drought relief in February and February every year. This time, the same as the previous two years, the difference is that the policy support is greater and the coverage is wider. The main beneficiaries are the construction of agricultural water conservancy projects, pesticides and fertilizers, agricultural-related devices and equipment, and agricultural products.

China Everbright Securities analyst Li Jie believes that this round of agricultural stocks rebound should seize the main line of price increases and rising expectations. At present, domestic attention is paid more to the impact of drought in the eight northern provinces on wheat, which will inevitably reduce production. Later, wheat prices may rise, and they will be transmitted to each other through the price ratio effect between crops. Transmitted to the market, the most direct subject is the transactional opportunities of rice: including planting company Dongfang Group, land lease, and inventory company Beidahuang. The upstream transmission is seed companies, such as: Denghai Seed Industry (002041, shares), Quanyin Hi-Tech, Dabeinong (002385, shares) and other companies, these companies will benefit from the increase in agricultural prices.

In addition, the rise in food will also push up feed costs. The downstream feed industry can only passively raise prices. Related companies include companies such as New Hope. Then there are breeding companies, mainly pig breeding and poultry breeding, and the transmission path is through feed. These companies will have to face severe pressure from rising costs, and there is still suspense whether they can smoothly transfer costs to the market.

Resolve farmers' psychology of reluctance to sell, increase grain purchase prices

According to Xinhua News Agency, the State Council held an executive meeting on February 9 to decide to increase the minimum purchase price of rice. This is the "four consecutive year increase" in the minimum purchase price of grain. In this regard, Political Commissar Lu, chief economist of Industrial Bank, said that the increase in the minimum grain purchase price will help increase farmers' enthusiasm for growing grain, resolve reluctance to sell, ease the situation of excessively rapid CPI rise, and reduce inflationary pressure caused by rising grain prices.

According to the content of the meeting, the minimum purchase prices for the third-class early indica, mid-late indica, and japonica rice produced in 2011 were increased to 102 yuan, 107 yuan, and 128 yuan per 50 kg, respectively, an increase of 9 yuan, 10 yuan, and 23 yuan from 2010. Among them, the increase in the minimum purchase price of japonica rice hit a new high since the minimum purchase price policy was promulgated in 2004, an increase of 21.9% from last year.

The political commissar of Lu believes that the minimum purchase price in 2011 is still lower than the average market purchase price at the end of 2010. Except for early indica rice, the minimum purchase price per 50 kg for other varieties is more than 8 yuan lower than the market price. Since the average market price is significantly higher than the minimum purchase price, the increase in the minimum purchase price has limited impact on the upward movement of grain prices.

It is reported that in the past four years, my country’s grain production has continuously increased income, but farmers’ enthusiasm for growing grain has not increased relatively.

Political commissar Lu believes that in recent years, the cost of growing grain in rural my country has continued to rise, and the increase has far exceeded the increase in the minimum purchase price during the same period. This means that the income from growing grain in rural areas may be declining. In 2010, the price of a variety of cereals doubled, and this year they may compete with wheat, rice, corn and other staple foods for planting acreage and input. Coupled with abnormal weather, it is difficult for the three major staples to continue to increase production.

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Time of issue:2020-07-22 00:00:00
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