On September 23, China ushered in the fourth Chinese Farmers' Harvest Festival. On that day, the performance structure of agricultural futures is obviously differentiated, and the market is still in the process of deep adjustment. Among them, palm oil rose more than 4%, corn rose 1.18%, while pig futures hit an all-time low, down 1.88%.
This year, under the goal of "carbon neutralization and carbon peak", black, non-ferrous and energy systems have a strong market trend under short-term supply constraints. And pig, corn and other agricultural and animal husbandry products appear supply and demand differentiation pattern, especially the aquaculture industry has appeared the tremendous pressure of losing production capacity. The 2021 China Agriculture and Animal Husbandry Industry (Derivatives) Conference, held on September 23, focused on the latest developments in the aquaculture and feed industries.
Jin Yuxi, purchasing director of Oriental Hope Group Co., Ltd., a large domestic feed enterprise, estimated that the domestic supply of live pigs may exceed 700 million; the scale of meat and poultry is about 16 billion, which also exceeds the balance point by 3 billion; the entire breeding market has entered the stage of losing production capacity.
In the period when the stock of pigs and poultry is so large, the domestic feed demand will usher in a peak. Statistics show that from January to August this year, the country's total feed output reached 190 million tons, an increase of 19.1 percent over the same period last year, of which pig feed production increased by 62.6 percent over the same period last year. At the same time, it has also led to a substantial increase in the scale of corn imports, with about 21.4 million tons of corn imports from January to August 2021, an increase of about 283.7% compared with the same period last year.
In the face of huge fluctuations in the market, more than 1800 industrial enterprises participate in pig futures trading, and more than half of the top 20 leading enterprises in pig farming become pig futures delivery warehouses. It is reported that in order to vertically extend the corn industry chain, the exchange is continuing to promote the R & D and listing of ethanol, fructose syrup and other varieties to further improve the industrial risk aversion chain.
The aquaculture industry has entered the stage of losing production capacity, and feed demand will reach a peak.
"now live pigs, meat and poultry have entered a loss cycle, are faced with the problem of capacity loss." Jin Yuxi said that based on the data of 45 million fertile sows released by the Ministry of Agriculture in July, the domestic pig supply could exceed 700 million, which means that pig prices will face great pressure for some time to come.
Similarly, in the meat and poultry market, it is also faced with capacity loss. The balance point of meat and poultry in China is about 13 billion. Due to the sharp rise in domestic pig prices in 2019, meat and poultry have quickly made up for the shortage of pigs. The number of meat and poultry has been maintained at about 16 billion in the past two years. The recovery of live pigs will reduce the price space of meat and poultry.
Jin Yuxi said that as aquaculture tends to be saturated, feed production is likely to stabilize at about 2.2 to 230 million tons after reaching the peak of demand, and wheat will become an anchor for the price of energy raw materials. The demand for soybean meal is likely to remain around 65 million tons during the 14th five-year Plan period.
"the increase in pig stocks has led to an increase in feed consumption." Wang Zongli, director of the National Animal Husbandry General Station, executive vice president and secretary-general of the China Feed Industry Association, said that the national feed grain consumption is expected to exceed 200 million tons. From January to August this year, the country's total feed output reached 190 million tons, an increase of 19.1 percent over the same period last year, of which pig feed production increased by 62.6 percent over the same period last year.
The substantial increase in feed demand has led to an increase in domestic feed grain consumption, especially the increase in corn imports. According to data released by the General Administration of Customs, about 21.4 million tons of corn were imported from January to August in 2021, an increase of about 283.7 per cent compared with the same period last year.
Such large imports have raised market concerns about domestic food prices, and the FAO global grain price index rose 31.1% at the end of August compared with the same period last year. However, compared with the international market, the prices of the four staple grains in China have risen, but the overall increase is limited, but the price of corn has increased greatly compared with the same period last year.
Data show that at the end of August, the purchase prices of corn and wheat in domestic grain enterprises rose 20% and 8% respectively compared with the same period last year; rice prices rose slightly, and the prices of early indica rice, middle and late indica rice and japonica rice rose 6.1%, 0.8% and 4.4% respectively compared with the same period last year.
Li Xigui, director of the grain and oil monitoring department of the State Grain and Oil Information Center, believes that grain output will remain above 650 million tons for seven consecutive years in 2021, the country's grain stocks are abundant, and there is still a solid foundation for the smooth operation of the grain market. Due to the bumper harvest of autumn grain on the market, the continuous release of policy grain, and strong measures to ensure supply and stabilize prices, domestic grain prices are expected to remain stable in the later period. However, Li Xigui also stressed that it should also be noted that the high operation of international grain prices will inevitably have a certain impact on the expectations of the domestic market, and due to factors such as increased demand and the obvious rise in the cost of growing grain such as land rent and chemical fertilizers, it is expected that there will still be some upward momentum in the prices of corn and other varieties in 2022.
Challenges and opportunities coexist in the agriculture and animal husbandry industry, and varieties such as ethanol and fructose syrup are being developed.
Due to the sharp fluctuations in the prices of corn and pigs, it brings severe challenges to the production, operation and risk control of enterprises. in the face of the rapid changes in the current domestic and foreign markets, animal husbandry and feed enterprises need to grasp the short-term and long-term development trends of product prices. use the futures market to avoid risk.
Zhang Yuchuan, deputy general manager of Galaxy Futures, said that at present, pig, soybean meal, corn, eggs and other varieties have formed a relatively complete closed loop of the feed industry, laying a good foundation for feed farming enterprises to make good use of futures and derivatives tools.
Statistics show that since the listing of pig futures on January 8, more than 1800 industrial enterprises have participated in pig futures trading, and more than half of the top 20 leading enterprises have become pig futures delivery warehouses. By the end of August, the cumulative trading volume of live pig futures was 2.56 million lots, with a turnover of 855 billion yuan, with an average daily position of 37000 lots, with corporate customers accounting for 36% per day.
In addition, the institute has set up a variety ecological circle of grain, live pigs and eggs, launched over-the-counter options business, launched over-the-counter trading of pigs, added 15 varieties such as corn, and carried out price information cooperation with spot platforms such as Shaanxi grain storage. the pattern of "one circle and two centers" in the over-the-counter market has basically taken shape, better meeting the diversified needs of industrial enterprises in spot trade, warehouse receipt trading and risk management. In the first half of this year, the total volume of over-the-counter market transactions reached 11.4 billion yuan, achieving great-leap-forward growth.
Xi Zhiyong, deputy secretary of the party committee and general manager of Dashang Institute, said that he will continue to make efforts in product innovation. Lengthwise extend the corn industry chain, continue to promote the R & D and listing of ethanol, fructose syrup and other varieties, and further improve the industrial risk aversion chain. We will actively explore product innovation with regional characteristics, steadily promote the listing of dried pepper futures, and help the regional economic cycle. At the same time, we will continue to deepen the "one product, one strategy", promote the landing of optimization programs for corn, eggs and other varieties, and do a steady and orderly job in deepening the development of pig futures to increase efficiency.
Secondly, it forms a joint force in the construction of the biosphere. We will deepen the construction of the ecological circle of agricultural products and other varieties, improve the system of over-the-counter market participants, and promote the landing of pilot over-the-counter pledge financing for standard warehouse receipts. We will optimize the standard warehouse receipt trading model, promote the opening of over-the-counter options to the whole market, expand non-standard warehouse receipt transactions to corn, eggs and other varieties, and speed up the formation of a new pattern of risk management for off-site coordination, futures and cash combined with service industry.
The third is to provide assistance in the service industry. Make use of the market brands of large trading houses, give full play to the role of financial institutions such as futures companies and leading enterprises, carry out multi-level and targeted industrial services, and actively guide enterprises to make use of the futures market to guard against the price risks of agricultural products. We will give full play to the role of the "Farmers' income guarantee Plan" and the "Enterprise risk Management Plan" of large and medium-sized Enterprises, and support small and medium-sized farmers and small and medium-sized enterprises in docking the commodity futures market.