Corn price soars after China's entry into WTO

Introduction: last week, one of China's two government authorized corn exporters said it had cancelled the export sales of 1 million tons of corn Is that true? Last week, the U.S Department of Agriculture reported that China bought up to 500000 tons of corn Is that true? As soon as Friday's report came out, it was like setting a fire to the Chicago futures market Corn prices soared and trading volume reached a new high So far, no one knows the details, and the truth may still be clear only to those who are directly involved But traders in Asia say one thing is certain - China's accession to the WTO has begun to count down, and recent events may be a small episode of China's adjustment to international business practices Traders say China's southern region will import corn next year, but the amount may not reach the total of 5.85 million tons of TRQ But that doesn't mean China will soon become a net importer of corn China may still try to export corn from the Northeast in the near future, especially at present, China's corn inventory is still sufficient "It can be imagined that if corn is imported into South China, it will make a large profit, and North China can get some of these profits as subsidies to export corn." "I think the volume of imports may be very large," said a trader in Malaysia Many traders are puzzled by reports that China has purchased 500000 tons of American corn because Beijing has not yet issued any import licenses China has not yet announced how to allocate TRQ after China's accession to the WTO But some people think that the two state-owned Chinese companies (COFCO and COFCO) together will get 68% of TRQ One of the two companies may have ordered corn ahead of time because the current price in Chicago is very low for them "If you are a buyer representing government procurement, you will definitely get TRQ." Said a trader in Singapore "It will be very easy for South China to import corn, even with corn rising on Friday, there will be at least $6 profit per ton South China purchases 6 million tons of corn from North China every year, and 500000 tons is nothing " On the export market, traders said that China was eager to export corn as much as possible and offer corn for sale at a discount price However, as the current subsidy for corn export will be abolished in February next year, no shipping company is willing to deliver goods after February next year They said it was becoming increasingly clear that China would not be able to load all the 3.5 million tons of corn sold in the August tender As a result, China has had to cancel or "void" some of its contracts It is becoming increasingly clear that China will not be able to ship all the 3.5 million tons of corn sold in the August tender As a result, China will either cancel or buy back some of the corn it has sold In the past, China will postpone the shipment "They have to cancel or buy back some of the corn they sell," said a trader in Beijing "By February, some corn will not be able to perform." "Major buyers, such as South Korea, Malaysia and Indonesia, basically don't have a place to buy on that date," he said In order to reduce the huge national grain reserve before China's accession to the WTO, China sold the corn at the price of $105 per ton FOB, with a shipping period from September to February Since then, international corn prices have started to fall, leading to the weakening of China's corn competitiveness in Asia, and international trade banks hold a large number of long positions Malaysian traders said, "some of them have made a lot of money in CBOT They are overjoyed that they can cancel their contracts on Chinese corn with a little money." Traders in Beijing say China could become a net importer of corn in the long run "But this year or next year, China will be able to balance supply and demand without importing, and I believe that if the market changes, China will still export," said one trader According to customs data, China's total corn exports reached 550000 tons in September and 330000 tons in October.