The influence of China's entry into WTO on the domestic corn market

Introduction: the impact of China's accession to the WTO on the domestic corn market At present, the domestic market is very concerned about China's accession to the WTO, and the focus is also on the details of commitments such as tariff quotas The reason is very clear China's accession to WTO means the elimination of corn export subsidies and the opening of corn import market As these factors significantly affect China's corn export and import, it will change the supply and demand pattern of China's corn market In particular, the impact of market psychological changes on the market price will be far greater than the impact on the quantity of imported corn It can be expected that the impact of WTO commitments on the future price trend of China's corn market cannot be underestimated, and the competition between corn in Northeast China and corn in the United States will expand from the competition for import markets such as South Korea and Malaysia to the competition for the market in southern China CNG first, China will cancel export subsidies after its accession to the WTO, but whether the fourth export bidding contract can be normally fulfilled will depend on the details of the government's commitment In the early stage of CNG, in order to reduce corn inventory as much as possible under the condition of corn market price falling, in August, the fourth export bidding exceeded 3 million tons of corn, because Asian importing countries such as South Korea have mostly completed the purchase of corn before November, and in the first year of next year After September, the demand for shipping schedule has not been met Previously, some of the shipping schedule in September and October specified by Jilin grain group and COFCO has not been digested According to customs statistics, China exported 547900 tons in September, of which 281300 tons were exported to South Korea Therefore, some export contracts may be extended to January and February next year, that is, after China's accession to the world trade organization If the price of Chicago falls again after December, it will lead to a lot of resale At the end of September, there was a rumor in the U.S market that China might cancel or resell 300000-500000 tons of corn export contracts scheduled for December After the fourth export bidding of CNG from China, the corn price in Chicago began to fall from the high level At present, the U.S market is a downward trend Chicago corn contract fluctuates between $80-82 / ton in December, and the resistance price will be $79-80 American corn is the cheapest in the international spot market If the government promises to cancel the export subsidies immediately, compared with the current price, it will lead to a large number of resale phenomenon; if the government does not cancel the export subsidies immediately, the corn shipped in December should not be dangerous According to the current corn market trend and the industry's expectation for the future generations of corn, CNG expects that the closing price of the third class corn in Dalian will fall to below 980-990 yuan / ton in January 2001 / 02 If the export subsidy is cancelled, the CIF price to South Korea is expected to be 125-126 USD / ton So what level will Chicago's price reach in January 2002? According to the forecast of the U.S Department of agriculture in October, the inventory consumption ratio of corn in the United States in 2001 / 02 was 14.76%, the lowest level in the past five years The U.S market will be strong in 2001 / 02 The average price of Chicago in the last three years in January is around 85-86 US dollars / ton It is estimated that this year's price may exceed 87 US dollars / ton Due to the fluctuating factors of January fundamentals, as well as the weather conditions in spring and export demand, the strength of the specific strengthening cannot be accurately predicted If the price is 87 US dollars per ton, the freight cost is estimated to be 106-108 US dollars per ton, because the war risk is about 20-22 US dollars per ton If export subsidies are not eliminated, there should be no danger in quoting us $105 per ton But the above analysis did not consider the quality difference of corn CNG secondly, if there is no accident, it is expected that China will join the World Trade Organization in January 2002 According to the tariff quota commitments reached in the negotiations, the import quota will be 5.695 million tons of corn in 2002, and the tariff within the quota is only 1%, but the specific import and distribution policies have not been formulated We believe that China does not necessarily import all quota corn, and how much corn can be imported depends on the comparison of domestic and foreign corn market prices CNG for example, in January 2002, the CIF price from the United States to Guangdong, China is estimated to be 106-108 US dollars / ton, plus 1% tariff and port quarantine fees of about 12 US dollars / ton, totaling 128-130 US dollars / ton, equivalent to about 1060-1076 yuan / ton According to the optimistic expectation, the closing price of Guangdong in the same period is expected to be around 1070-1080 yuan / ton American corn will have a price advantage over Chinese corn, which has not yet calculated a quality difference of about 40 yuan / ton CNG recently American agricultural counsellor said that China is unlikely to export 3 million tons to 3.5 million tons of corn by means of large export subsidies from October 2001 to February 2002 Instead, it can only reverse in January September 2002, importing 2.8 million tons of corn according to the market price including shipping costs CNG but we believe that China is unlikely to import 3 million tons of corn in 2001 / 02, because the domestic corn market is still oversupplied in 2001 / 02 Once the corn import increases, it will aggravate the imbalance between supply and demand in the market and further reduce the domestic corn price At the same time, the increase of U.S exports will push the price of Chicago higher, which in turn reduces the price advantage of American corn cNg     cNg