International Mad Price Fluctuations Perturb China's Inflation?

From the side of the disk, since agricultural products gained weather hype material, since July, international agricultural products have been favored by international speculation funds. At present, Russia is arid, Canada is experiencing heavy rainfall, EU countries continue to experience droughts, and Australia has experienced disasters. The State Reserve of India has experienced food corruption, all of which have contributed to the increase in wheat futures prices. As of 11:00 AM on August 18, 2010, Chicago September wheat reported at 654 cents per bushel, a 53.7% increase compared to the June 9th sessionary low of 425.5, compared to August 6th. The highest price of this round of speculation was 841 cents per bushel, down 22%.

It is worth mentioning that on June 9th this year, the wheat saw a sessional low of 425.5 cents per bushel, almost the same level as the 412 cents per bushel of the start of the last round of the food crisis in April 2007. It can be seen that the current rise in international food prices is a major rebound triggered by the international capital’s use of weather speculation after a relatively long period of relatively low growth.

Global wheat supply and demand balance The drought destroyed the Russian crop is only equivalent to 1.6% of global wheat production. At present, the outbreak of the global food crisis lacks a foundation. The World Bank recently stated that speculators may be short-term drivers of fluctuations in food prices, and supply and demand fundamentals will ultimately determine the trend of food prices.

From the perspective of the overall international supply and demand, global wheat supply and demand balance. The UN Food and Agriculture Organization (FAO) said on August 4th that global wheat production in 2010 will be 615 million tons, which is still the third highest in history. After two consecutive years of record high output, the international wheat inventory is sufficient to make up for the reduction in production in 2010. Caused by the gap.

The wheat output can fully meet domestic needs. According to statistics from the National Disaster Reduction Committee and the Ministry of Civil Affairs, as of July 27, the floods since July 14 caused an area of ​​2.513 million hectares of crops in the country, and a total area of ​​417,000 hectares. Data from the Ministry of Agriculture show that compared with the previous year, the current planting area of ​​early rice has increased by about 86,000 hectares, and the area for autumn grain sown is expected to increase by more than 667,000 hectares. The wheat output in 2010 will exceed 115 million tons, which can fully meet domestic needs.

According to data from the Ministry of Agriculture, China’s annual wheat output exceeds 100 million tons, and imports are less than 1%. China now has more than 200 million tons of grain stocks. After the disaster, the country took corresponding measures to ensure supply. This year, China's wheat stocks consumption ratio has reached its highest peak since 2002/2003.

In addition to soybeans, the self-sufficiency rate of agricultural products in China is currently about 95%. China maintains a relatively independent grain pricing system, and carries out macro-control through storage, storage, and dumping of deposits, thus weakening the impact of international food price fluctuations. Therefore, from the perspective of supply and demand, the international wheat price speculation has little effect on the price of wheat in China.

The new policies for the regulation and control of the agricultural products market have been introduced in succession. The country has recently introduced a series of new policies for the control of agricultural product markets. At the end of July, the National Development and Reform Commission issued a number of relevant government documents concerning the control of the agricultural product market, the minimum purchase price of grain, temporary storage, and grain and oil purchase policies. As a result of the strengthening of state regulation, the flood-driven rise in domestic food prices will not continue. The state must guarantee that the CPI will be controlled at around 3% during the year and will cast reserves to protect the market supply.

Last year, the circulation of the Central Bank’s M1 was 3.04 times that of the previous year. The increase in currency liquidity made the prices of industrial products, minerals and agricultural products rise by 24%, 31% and 10% respectively in the first half of the year. Statistical charts show that since the beginning of this year, the annualized monthly rate of M1 money supply in China has been declining year-on-year, and is close to the low level since June last year. Because of the lagging effect of regulatory measures, the effect will appear several months later. It can be expected that the state will guarantee that the target of controlling CPI at around 3% during the year is expected to be successful.