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What is the current price of corn?
Autumn grain production accounts for 3/4 of the annual grain production, and corn is the mainstay of autumn grain. Corn prices have always been a focus of attention from all walks of life.
Experts say that the overall price of corn this year is not high, starting to decline from October 2023 and remaining relatively stable in the first half of 2024. The wholesale price in the production area was 1.16 yuan/jin in January, between 1.14 yuan/jin and 1.18 yuan/jin from January to July, and between 1.24 yuan/jin and 1.26 yuan/jin in the sales area, with little fluctuation. The price began to decline in August, but not significantly. The average wholesale price in the production area was around 1.14 yuan/jin, and the wholesale price in the sales area dropped to 1.23 yuan/jin. The decline in September was relatively more pronounced, with wholesale prices in production areas reaching 1.1 yuan/jin nationwide, which has returned to the level of September 2020. At the end of September, prices were even lower, ranging from about 1 yuan/jin to 1.05 yuan/jin. This refers to the price of dry food, which is the price of 14% water. Farmers may feel that the price of moist grains or sticks may be lower, such as moist grains with 30% -40% water, which can cost 8 cents or even 7 cents in some places. There is a difference between wholesale prices and local prices, and there is a certain cost involved in shipping at local prices.
March 2021 is the highest price period for corn in the past two years, with the monthly average wholesale price in the production area reaching over 1.3 yuan/jin, and some places even reaching 1.42 yuan/jin, or nearly 1.5 yuan/jin.
According to expert analysis, the main reasons for the low corn prices this year are as follows:
High production and loose supply. In 2023, the total corn production in China reached 289 million tons, an increase of 4.2% compared to 2022, while consumption did not show a significant increase. This year's new season corn is on the market, coupled with the fact that old corn is still in the market, resulting in loose supply in the market.
Purchasing companies and traders should be cautious and maintain low inventory levels. If they increase their inventory, they may purchase more corn, but currently they are cautious in stocking up due to the expectation that prices will not rise.
In the past two years, the import volume of corn has been considerable, which has also played a certain role in the loose supply of corn.
Will the international corn market affect the price of corn in China?
In recent years, influenced by factors such as abundant supply in the global corn market, China's corn imports have remained high, exceeding import quotas for four consecutive years. In 2023, it reached the second highest in history at 27.13 million tons, an increase of 31.6% over the previous year. So, why import so much corn? Aren't you afraid of impacting the domestic corn market?
According to experts, since last year, the global corn market has had relatively loose supply. In 2023/24, global corn production reached a historic high, which has led to a continuous decline in international corn prices. Currently, US corn futures prices have fallen to around the cost line, at $160 per ton. From a horizontal comparison, the price decline of corn in China from January to August this year was 5-6 percentage points lower than that of foreign countries, indicating that China's corn market is relatively stable compared to the global market. There are two main reasons why China's corn imports have exceeded the quota for three to four consecutive years. On the one hand, since 2020, China's corn production has shown a stage of insufficient demand. In 2020, China's corn production was more than 20 million tons less than the demand, and there has been some improvement since then; On the other hand, there are also considerations for implementing the China US economic and trade agreement and expanding imports. The continuous exceeding of corn import quotas in our country is an active choice that takes into account various factors in domestic and international markets, and is a phased situation.
In fact, the impact of importing a large amount of corn on China's corn market is not as significant as imagined. From a price perspective, from 2020 to October 2023, corn prices in China have remained at historically high levels. In October 2023, the wholesale price of corn in China was 1.41 yuan per kilogram, only one cent lower than the historical highest price. This also indirectly proves that the impact of China's corn imports on the domestic market is not as significant as the import quantity shows.