International wheat prices have risen sharply

In terms of global wheat supply and demand, according to the supply and demand report previously released by the U.S. Department of Agriculture and Rural Affairs, the total global wheat demand in 2021/2022 is 787 million tons. The wheat production that year was only 779 million tons, which means that the international wheat market has a supply gap of about 8 million tons.

Wheat exports from two countries accounting for one-third of the world's wheat exports have been blocked, further increasing the international wheat supply gap.

Coupled with the hoarding and malicious speculation of some international businesses, as well as the irrational reassurance of wheat prices led by futures, the cumulative increase in global wheat has now exceeded 40%.

The wheat market is in turmoil again

Domestic new season wheat has been launched sporadically, and the current domestic wheat price trend is still normal. The price of old wheat is slowly falling, and it is gradually moving towards the price of new wheat. Get closer.

As for new wheat, although the listing volume is increasing, the number of companies that have begun to acquire new wheat is also increasing, so the price of new wheat is still relatively ideal. Shandong Weifang Xiangye Flour's new wheat price is 1.56 yuan, and the developed group East District new wheat is quoted at 1.48 yuan, Hebei Baixiang Wudeli new wheat is quoted at 1.54 yuan, and Handan Wudeli new wheat is quoted at 1.55 yuan.

Different from the "peaceful atmosphere" in the domestic market, the international wheat market is in turmoil again:

1. The total global wheat production has been reduced.

On May 13, the United States Department of Agriculture released its first global agricultural supply and demand report for 2022-2023, in which total global wheat production was reduced by 4.5 million tons from last year to 774.8 million tons.

2. Wheat stocks are in short supply. The ending stocks of wheat in 2022/2023 have dropped to 260 million tons, the lowest level in the past six years.

3. Of course, the biggest disturbance is that India, the world's second largest wheat producer, suddenly announced a ban on wheat exports. Behind this move, on the one hand, India's wheat exports surged to 1.4 million tons in April. An increase of nearly 5 times compared with the previous year.

On the other hand, India's expected wheat production is 5.7% lower than the expected output made in February, falling to 105 million tons.

The decline in production combined with the increase in imports has caused India’s domestic wheat prices to reach the highest level in 10 years. In order to ensure sufficient domestic supply, India can only ban wheat exports.

What impact will it have on the prices of my country’s “three major staple foods”?

1. Impact on wheat prices

my country’s wheat self-sufficiency rate is above 90%. In 2021, my country will import 9.77 million tons of wheat, while the total domestic wheat production will be 1.37 billion tons, and imports account for 7.1% of domestic wheat production. Although the self-sufficiency rate is high, the rise in international wheat prices will still raise domestic wheat prices.

In March, when international wheat prices rose most fiercely this year, the price of wheat in my country once rose to 1.6 yuan, and even reached 1.7 yuan in high-price areas.

Judging from the current international food supply and demand situation, there is a high probability that international food prices will continue to rise, and this will inevitably affect the country.

Considering that due to the rain last autumn, more than 110 million acres of wheat in our country were sown late, and there may be a problem of harvest failure. It is expected that the domestic wheat price this year will be at the current level of 1.5-1.6 yuan. continues to rise.

2. Impact on corn prices

The impact of wheat on corn prices is mainly reflected in substitution. If wheat prices have an advantage on the feed side, it will replace corn and lead to demand for corn. The volume decline is not conducive to the stability or increase of corn prices.

If there is no advantage in wheat prices, then all demand for feed will fall on corn, which will keep the demand for corn at a high level, which will help to increase corn prices.

The current wheat price has lost its substitution advantage when it is above 1.5 yuan. If it continues to rise in the future, there will be no substitute for feed. The rise in wheat prices will also drive up the price of corn.

3. Impact on rice prices

Although wheat and rice are both important grains in my country, one is in the north and the other is in the south. The two have little influence on each other. Wheat prices will basically have no impact on rice prices.

But the current situation is that wheat prices are high. If feed companies seek other food alternatives, they can only choose rice. This will increase the market demand for rice and help to increase rice prices.

However, considering that domestic rice reserves are sufficient and have very strong ration attributes, it is expected that its price will only rise slightly.