Analysis of the influence of China's entry into WTO on global corn price

Introduction: on November 11, the WTO ministerial meeting approved China's accession to the world trade organization, and on December 11, China officially became a member of the WTO China's accession to the WTO will have different impacts on all walks of life Here is an analysis of the impact of China's accession to the WTO on the corn market -- after China's accession to the WTO, China's corn export will reduce China's corn production In 1998 and 1999, China's corn production won a big harvest for two consecutive years At the end of 1999, the government decided to subsidize the export of corn Since then, China's corn entered the international market at a low price and replaced the United States as the largest supplier of South Korea and Malaysia, while occupying a certain share in the Japanese market In 2000, China exported 10.5 million tons of corn, 6.02 million tons to South Korea and 2.1 million tons to Malaysia, while South Korea and Malaysia imported 8.5 million tons and 2.4 million tons of corn, respectively China's share of corn in these two markets reached 70% and 87% respectively Since this year, the export volume of corn in China has declined significantly compared with the same period of last year According to customs statistics, China exported 4.86 million tons of corn from January to October, of which 2.73 million tons were exported to South Korea and 1.03 million tons were exported to Malaysia Although the share of corn in these two markets in China has declined compared with that in 2000, it still accounts for a higher proportion In addition, in the Japanese market, the export volume in the first ten months of this year was 350000 tons, three times that of the whole year in 2000 In the past two years, China's export of such a large amount of corn is mainly due to government subsidies The subsidies of up to $44 per ton make China's export price of corn very competitive in the international market However, with China's accession to the WTO, China has promised to cancel the export subsidies of corn, which means that China's export price of corn will rise from the current 105 US dollars / ton to 149 US dollars / ton, which is unacceptable to international buyers At present, the FOB price of American corn is only more than 90 US dollars Even though the export price of corn in China has not risen to such a high point, the price after the elimination of subsidies will certainly be much higher than the current price, so the export competitiveness of China's corn will be lost, and the export of corn after China's accession to the WTO is bound to be reduced Of course, if the government takes other support measures, it will be another matter -- after China's accession to the WTO, it is inevitable that China's corn import tariff quota will be 5.85 million tons in 2002, and will increase to 7.2 million tons in 2004 In 2002, the proportion of state-owned enterprises, private enterprises and private enterprises will be 68%, 32% and 40% respectively That is to say, if the state grants the quota in full, there will be 1.87 million tons of corn imports in 2002 in the hands of private enterprises Even if the state does not issue the quota in full, as long as the quota is issued, the private enterprises will have a share, and once the commercial conditions are appropriate, these private enterprises will import, so in theory, corn import is inevitable However, if we only look at 2002, China's corn import prospects are not very optimistic, because at present, China's corn supply and demand are basically balanced, because there is enough inventory, corn supply will not be in short supply, and China's corn production also rebounded in 2001 / 02, which will prevent corn import to some extent In addition, China will not become a formal WTO member until December 11 at the earliest If the quota is issued at the end of this year, the time will be very tight Therefore, the government may postpone the issuance of the quota Assuming that the quota will be issued before the middle of next year, and the private enterprises will order when they get the quota, plus the transportation time of one month or so, it will be exactly when the imported corn arrives in China It's time to harvest domestic corn At this time, the price of domestic corn will face harvest pressure and go down Importers may not be willing to import a large amount of corn at this time -- corn prices may rise in the international market According to the above analysis, there are two factors that may cause the price of corn to rise On the one hand, China's exit from the export market, while Brazil's and South Africa's corn exports are often very unstable, so rice supply in the future may be completely dependent on the United States and Argentina, and the reduction of supply will lead to the price rise of corn; on the other hand, China will expand the import of corn, The increasing demand for corn in the international market will also lead to the increase of corn price But for China, the decrease in exports and the possible increase in imports mean that the supply of corn in the domestic market will increase, which will weaken the domestic corn price -- the demand of South Korea and Malaysia, the big buyers of Chinese corn, will turn As the export volume of Chinese corn falls this year, South Korea, the biggest buyer of Chinese corn, has started to turn the corn source countries to the United States, Brazil and Argentina in South America Therefore, once China cancels export subsidies, South Korea's corn imports will completely turn to these countries Brazil was originally a corn importing country, but this year's corn production achieved an unprecedented harvest, so it became a net corn exporting country, and exported corn to South Korea for the first time But Brazil's corn production is expected to decline next year, so Brazil will not be a long-term corn exporter Argentina is a big corn exporter, but this year's flooding in Argentina has led to the decline of corn planting area There is no doubt that corn production will also decrease, and the export of corn will also decline In this way, South Korea's dependence on American corn will increase, and the United States will once again become the largest corn supplier of South Korea as it did two years ago Malaysia may turn to Argentina and Thailand There are many factors for Malaysia to become the second largest buyer of corn in China First of all, China's corn is cheap Second, China's corn transportation mode is flexible and the quantity of shipment can be large or small, which is suitable for unloading at ports of some small islands in Malaysia Third, compared with America and Argentina, China's corn transportation time is short Fourth, China The water content of corn is low, but the yellow pigment is high, which is popular in local chicken farm The fourth factor is the lack of corn in the United States, and the main reason why the local livestock industry does not like corn in the United States But Argentine corn has this factor, so since this year, Malaysia has imported a lot of Argentine corn, and most of the Argentine corn rejected by Indonesia in the first half of this year has been transferred to Malaysia If China's export supply is significantly reduced, Malaysia is most likely to turn to Argentina to import corn Malaysia's import from Thailand will continue because Thailand, like China, can be transported by boat, which is very convenient for Malaysian importers However, Thailand is not a traditional corn exporter either It is predicted that the output in 2001 / 02 may not meet the domestic consumption demand As for the Japanese market, China's share of the market is not large, but the price of corn in the market has always been relatively high After China's accession to the WTO, China may also export a small amount of edible corn to it (author:) share to feed Weibo share to: