Rice: The comprehensive analysis and suggestions of the market in the later stage of the market situation on the impact of the purchase strength of the city on the supply side of the rice supply side of the city

On October 23, Anhui Province launched the 2021 mid-to-late Rice Toa City acquisition plan, and on October 28, Jiangxi Province also launched the mid-to-late Rice Toto City purchase, which will boost the continued weak rice market and also indicate the basic formation of the bottom of the market stage. So how will the rice market trend develop next, and how should growers, drying plants and rice companies choose?

<h1 class="pgc-h-arrow-right" data-track="3" > rice supply-side situation</h1>

1. The supply of rice market in 2020 will increase significantly year-on-year

In the second half of 2020, due to the continuous rise of the rice market, corporate procurement was actively rising, and the transaction volume of policy-oriented rice reached 17.23 million tons, an increase of more than 4.6 million tons year-on-year, hitting a record high. In 2020, the total rice production increased by more than 2.2 million tons year-on-year, while the purchase volume of the city was only 6.1 million tons, a sharp decrease of more than 16.7 million tons year-on-year. The increase in policy-oriented rice transactions, the increase in rice production and the decrease in the purchase of the city increased year-on-year, and the supply of rice markets brought by the three items increased by more than 23 million tons year-on-year.

2. Imported rice is expected to hit a new high in recent years in 2021

According to data from the General Administration of Customs, China imported 380,000 tons of rice in September, an increase of 138.5% year-on-year; from January to September, the cumulative import of 3.56 million tons, an increase of 113.6% year-on-year. The total import volume for the whole year of 2020 was 2.91 million tons.

3. A bumper harvest of new grain is in sight

From 2016 to 2020, China's rice planting area showed a fluctuating decline trend. According to the National Bureau of Statistics, China's rice sown area in 2020 was 30.08 million hectares, an increase of 1.3% year-on-year. China's rice production in 2020 was 212 million tons, an increase of 2.25 million tons or 1.1% year-on-year.

Judging from the market research situation this year, this year's rice is expected to be fruitful again, and the output is expected to be more than 210 million tons.

<h1 class="pgc-h-arrow-right" data-track="47" > the size of the acquisition of the city affects the later market</h1>

Anhui Jiangxi has successively launched the purchase policy of the city, this news has undoubtedly boosted the confidence of the rice market that continues to be weak, and at the same time, it can also form a bottom support for the rice market at this stage, and the rice market will also show signs of stabilization in the short term, but there is no obvious condition for rebound.

As we all know, the national entrustment city purchase policy stipulates that the deadline for the acquisition of the indica rice producing area is January 31 of the following year, and the deadline for the purchase of the northeast japonica rice production area is February 28 of the following year. China's 2022 traditional festival Spring Festival is February 1, according to traditional customs, rural residents have to buy New Year goods half a month in advance, and the Spring Festival until the fifteenth day of the first month is to visit relatives and friends, so that we can basically calculate the effective time of the purchase of the city, but also to exclude the time of normal acquisition and warehousing due to rainy weather and other factors.

This year's planting costs have risen year-on-year, compared with the same period of the previous year, the sales price gap is too large, growers generally have a reluctance to sell, has been dried and merged into the warehouse of grain, in the case of no significant increase in sales prices, growers are less willing to sell.

In addition, due to factors such as storage safety and standardized management, the storage methods of old, old, dangerous warehouses and other warehouses and leased private enterprise warehouses this year are excluded from the acquisition points of the trust city, so it is difficult to say how much acquisition volume can be achieved in such a short period of time.

<h1 class="pgc-h-arrow-right" data-track="49" > comprehensive analysis and recommendations</h1>

Combined with the raw grain inventory of rice processing enterprises in the previous year, the supply of new grain markets and the import of rice, if there is no large-scale start of the acquisition of the city, or an appropriate extension of the acquisition time, the acquisition of the city does not reach a certain volume, the stabilization of the rice market is only temporary, and there will be a bottoming process after the Spring Festival. It is therefore recommended that:

1. Large grain growers should actively sell to avoid risks

According to the current situation of rice purchase and sale, the start of the purchase of the city is first of all a major positive for the majority of growers, at least do not have to worry about the difficulty of grain sales or the low sales price to bring losses, it is recommended that large growers try to seize the opportunity to sell in a timely manner, so as to avoid the market after the city acquisition stops the market again appears weak.

2, see the good to put away the bag for safety

If the drying manufacturers and pre-purchase points in stock can be sold at a favorable price, if some of the grain with a higher cost than the purchase price in the early stage is not sold in time, it is advisable to split the low-cost part of the grain and sell it in a timely manner, and the high-cost part that cannot be sold at the same price should be sold at the opportunity to diversify the risk.

3. Lessons from the past, do not repeat the mistakes of the past

According to the current situation that the rice market is still weak and the procurement entities continue to hold a wait-and-see attitude, it is recommended that rice processing enterprises should still take light inventory as appropriate, ensure that the grain required for daily order processing can be used, and order orders on the market, and it is not appropriate to build inventory on a large scale before the rice market situation is unclear and stable.