The number of grain related enterprises in China has increased greatly. What is the prospect of the industry?

category:Finance
 The number of grain related enterprises in China has increased greatly. What is the prospect of the industry?


The rise of grain prices and the increase of enterprise profits are the main factors for the large increase of grain related enterprises this year. Li Guoxiang, a researcher at the Institute of rural development of the Chinese Academy of Social Sciences, told China News Agency reporters.

The analysis shows that the uncertainty of the international grain market makes the relevant domestic practitioners have the expectation of rising grain market. This year, novel coronavirus pneumonia affects the supply of food in some countries. According to the food and Agriculture Organization of the United Nations (FAO), world food prices rose for the third consecutive month in August.

Driven by the grain market, Chinas agricultural industry has been booming in an all-round way since this year. From the perspective of the securities market, from the beginning of the year to the end of September, the overall growth of agriculture, forestry, animal husbandry and fishery sector was 35.68%, of which the agricultural products processing sector was the largest (55.82%), followed by the planting industry, feed industry and livestock breeding industry, with an increase of 50.81%, 34.42% and 28.27% respectively.

Looking forward to the later stage, what is the development prospect of grain industry? Can a large number of enterprises enter into the market continuously to make profits?

Li Guoxiang said that although the large growth of grain enterprises is conducive to enhancing competition, this trend is not sustainable. There is limited room for grain prices to rise, and the market will not soar.

Food is the most important thing for the people, and food is related to national security. China has always attached great importance to food security and put grain production in the most important position. Li Guoxiang said that Chinas grain supply is relatively adequate and there is no room for grain prices to rise significantly. The government will not allow the price to rise. In addition, cost price competition is still the mainstream pattern of the international grain market. In the face of fierce international competition, China will also maintain stable grain prices.

Since this year, in order to ensure food security and improve the enthusiasm for farming, the state has issued a series of policies to support agricultural production. Some analysts believe that this is also one of the factors contributing to the increase of grain related enterprises this year.

Li Guoxiang said that although the states subsidy support for grain production is relatively large, it is mainly aimed at grain producers with farmers as the main body, and the support for enterprises in such links as processing, circulation and storage is not very strong. At present, Chinas grain processing, circulation and reserve capacity is surplus. Before entering the market, enterprises must make sure that they do not blindly follow suit and do not excessively expect to rely on national policies.

Looking forward to the later stage, Li Guoxiang said that under the continuous influence of the global epidemic situation, international food prices still have certain impact on domestic expectations, and grain prices will rise slightly next year, but with the increase of planting area and cyclical fluctuations, the increase range is limited. It is unlikely that the profit of grain related enterprises will continue to rise. In the face of fierce competition, some homogeneous competition enterprises enter excessively, which makes it difficult for them to make profits and may also suffer losses.

As autumn grain is about to harvest, Chinas grain prices have added a stable foundation. Han Changfu, Chinas minister of agriculture and rural areas, said that Chinas autumn grain harvest is a foregone conclusion, and the annual grain output will be stable at the level of 13000 billion jin for six consecutive years. This years corn is also a good harvest year. New corn will be harvested and listed, and the supply will increase. Recently, the market price of corn has begun to stabilize, and the future price will not rise significantly. Recent data show that the rising trend of Chinas grain prices has been suspended and began to fluctuate and decline. In September 2020, the grain price index dropped to 104.29 from 105.02 in August. From the beginning of September to September 25, agriculture, forestry, animal husbandry and fishery sector fell by 10.96%, of which the planting industry fell by 10.19%, and the market began to cool down. Source: Zhang Mei, editor in charge of China News Network_ NF2100

As autumn grain is about to harvest, Chinas grain prices have added a stable foundation. Han Changfu, Chinas minister of agriculture and rural areas, said that Chinas autumn grain harvest is a foregone conclusion, and the annual grain output will be stable at the level of 13000 billion jin for six consecutive years. This years corn is also a good harvest year. New corn will be harvested and listed, and the supply will increase. Recently, the market price of corn has begun to stabilize, and the future price will not rise significantly.