Consideration on Market-oriented Reform of Sugar Market in China

On Nov. 28, the domestic interim sugar bottoming shocks rebounded, and Zheng Tang's far and near contract trend synchronized. Among them, Zheng Tang 1901 opened 4960, the highest 4977, the lowest 4932, the closing 4964, up 6 yuan, with a turnover of 184,000 hands, a position of 1793,000 hands and a reduction of 0.3 million hands. Take out a small Sunline with upper and lower shadow lines. Zheng Tang 1905 contract opened 4896, the highest 4915, the lowest 4875, the closing 4912, up 13 yuan, trading 1421,000 hands, holding 316,300 hands, increasing the warehouse by 440,000 hands, a small Sunline with a shadow line, the bottom is supported.

The short-term and medium-term average of Zheng Tang Index diverged downward, while the 5-day average at the closing station was still under pressure. MACD vulnerable areas continue to open downwards to close, the green column has been reduced. KDJ low gold fork occurred, has not yet diverged upward, trading volume has shrunk, K-line graphics show preliminary signs of stop.

Liuzhou spot market is near weak and far strong, of which Liuzhou 19013 contract opened 5001, the highest 5008, the lowest 4951, the closing price dropped 5,055.10 yuan, trading 36,100 hands, holding 421,400 hands. Liupan 19053 contract rose 11 yuan to 5,000 yuan.

Spot prices of main sugar producing areas in China have steadily declined: Guangxi: Nanning intermediary platform has no quotation for the time being; warehouse quotation is 5270-5290 yuan/ton, the quotation remains unchanged and the transaction is general. There is no quotation for Nanning Group platform; the new sugar quotation for factory warehouse is 5260-5310 yuan/ton, the quotation remains unchanged and the transaction is general. There is no quotation for Liuzhou Intermediary Platform and no quotation for Warehouse. Liuzhou Group Platform New Sugar Pre-sale quotation 5350 yuan/ton, the quotation remains unchanged, the transaction is general. Guest middleman warehouse is not quoted yet. Qinzhou middleman warehouse has no quotation yet. There is no quotation for your middleman warehouse.

Yunnan: Kunming middleman Chen Sugar quoted 5080-5100 yuan/ton, new sugar quoted 5200 yuan/ton; Dali quoted 5040-5060 yuan/ton; Xiangyun quoted 5030 yuan/ton, the quotation remains unchanged and the transaction is general. Kunming Group quoted 5100 yuan per ton for Chen Sugar and 5200 yuan per ton for New Sugar. The quotation remains unchanged and the transaction is normal. Guangdong: Zhanjiang intermediary new sugar quoted 5270 yuan/ton, the quotation remains unchanged, the transaction is general. Xinjiang: Urumqi middleman new sugar quoted 5000-5200 yuan/ton, old sugar quoted 4950 yuan/ton, quoted unchanged, general turnover.

To sum up, today's domestic sugar bottom shocks rebounded, and eventually returned with a positive line, receiving two Lianyang. However, the two Yang Line entities did not recover the first three Lianyin, still did not stand on the sugar club since the 10-day average suppression. From the persistent shrinking volume, the upside of the two consecutive transactions is more from short covering than multi-party active buying, and its upstream persistence is doubtful.

Yesterday's article on capital market construction of sugar industry had less than 300 clicks. It seems that people have little interest in the subject of sugar industry development and prefer short-term information. In fact, whether short-term or mid-line or long-term, mainly in the squeezing season, are built on the framework of sugar industry development, lack of understanding of the development of the sugar industry as a whole is easy to blind, or peep into the leopard, there are more lucky profits. The domestic sugar industry development framework determines the long-term trend, and the long-term trend determines the medium-term trend, while the short-term trend depends more on technology. A successful portfolio has a long-term one-sided position, but it is difficult to achieve success only in the short-term. At present, the major framework for the development of sugar market in China is the market-oriented reform of sugar market. Only by correctly and profoundly recognizing this problem can we write a good essay. No matter the sugar industry chain or government regulation, it will be solved easily. As for the sugar operation, we can have a good idea.

First of all, does the domestic sugar market need to be reformed? There is no doubt that the reform of sugar market has already been put on the agenda. Especially under the Sino-US trade war and the so-called new zero-tariff and zero-subsidy trade rules, WTO reform has begun, and it is more difficult to maintain multilateral trade. Although the domestic sugar purchase price is extremely high mainly because of China's situation from poverty to prosperity and power, the overall income level of the Chinese people has increased, farmers will change their crops if the sugar purchase price does not increase, and sugar enterprises are also forced to do so. This is in line with the fact that many developed countries generally adopt direct subsidies to increase sugar farmers'income and narrow the income gap between rich and poor. Dissimilarity. However, it also causes great trouble to sugar enterprises. In order to ensure that sugar enterprises are not bankrupt, countries can only find ways to maintain high sugar prices, which in turn damages the interests of consumers. In order to maintain high sugar prices, imports can only be restrained as far as possible under the WIO principle, which inevitably leads to international trade disputes. Therefore, the domestic sugar market must carry out market-oriented reform.

Secondly, what is the purpose of market-oriented reform of sugar market in China? Many people think that the market-oriented reform of sugar market is in line with the internal and external prices, and there is some reason to choose one of the directions. But Bingfeng believes that the ultimate goal of the domestic market-oriented reform is to increase the income of sugar farmers in the final analysis, and to greatly increase the income of sugar farmers. For example, from 500 yuan per mu to 1500 yuan or even 2000 yuan per mu, only in this way can the income gap between rural and urban areas be narrowed and the solemn promise of jointly entering a well-off society be fulfilled. This is the fundamental reason why Bingfeng has repeatedly suggested that all the regulatory measures of sugar industry should be returned to the "interests of sugar farmers", including the reform of national storage of sugar, sugar reform, direct subsidy implementation, sugar enterprise reform, sugar distribution model, large data platform, sugar base, double-high base, sugar industry park, punitive tariff and so on. It's all about this. One of these reform measures alone will be criticized, prejudiced and misunderstood, but when they are brought together, we can see all the mountains are small.

Finally, what is the process of marketization reform of sugar market in China? In choosing whether to implement the strategy of low sugar price or high sugar price, Bingfeng is not clear whether the relevant ministries and commissions have been determined, and specific analysis will be made later. The only certainty is that the market-oriented reform of sugar market must be:'Let the market play a decisive role in the allocation of resources', but this does not mean that the sugar market is simply and roughly pushed to the market, and the survival of the sugar industry is directly determined by the market. In another analogy, it's like a baby eagle that has been breastfeeding for several months. It's not only necessary for the baby eagle to grow feathers, but also to drive out of its nest at the right time to learn how to fly, so as to soar in the blue sky.

Therefore, the domestic sugar market reform is full of opportunities, but more challenges, but also full of uncertainty. We should not only be proactive, but also ensure that there is no chaos, stable in the first place, and has a long-term nature. Today, China's sugar market and the international sugar market are getting closer and closer. We will not choose to implement it in the bear market of the international sugar market. The most likely thing is to take advantage of the bull market of the international sugar market. At present, the sugar output of farmers in the international sugar market is declining sharply because of the low sugar price. A new round of bull market is coming out, which creates conditions for the reform of sugar market in China. Whether it is high sugar price or direct supplement of rumors or national storage, it is not only part of the reform, but also escorts the reform of sugar market. This is one of the reasons why Bingfeng denies national storage in order to suppress the domestic sugar price.

In a word, the market-oriented reform of sugar market in China needs a relatively stable environment for sugar price. The fluctuation of sugar price will not only aggravate the existing contradictions, but also increase the difficulty of reform. This includes the stimulation of the long-term trend of RMB appreciation to US dollar on sugar import. The long-term trend of RMB appreciation against the US dollar is contrary to the financial law. It is not too bad to say that China's economy is once again strong and rising, but it is more an all-round need. As the market-oriented reform of sugar market has a long-term nature, the impact of relevant supporting measures on the market is also a trial-and-error process. It is difficult to judge the long-term impact of sugar prices. The existing policies should ensure that sugar enterprises turn losses into profits. This is the basis on which Bingfeng believes that domestic sugar prices will recover in the later period of this squeezing season. One. Until March next year, China is at the peak of sugar squeezing. The game between supply pressure and production cost of new sugar is expected to maintain a relative balance in the medium term, that is, the fluctuation of the main interval of 4800-5200 as Bingfeng said.

Domestic sugar market reform is the key to understand all sugar market policies. Because domestic sugar market is a process of re-fragmentation or more integration with international sugar market, the impact of international sugar market on domestic sugar price will be enhanced to weaken or weaken to strengthen, in the short term, to weaken. This determines that the small four waves adjustment and the small five waves rise, which are expected to end the external market, are limited to boost domestic sugar prices. At present, the domestic sugar market is facing a technical rebound in the short term, but it should not be overly optimistic, and the trend of forming a false breakthrough downward can not be ignored. Of course, all predictions are biased, and only God is always right.

Author: Bingfeng; Source: Yisheng Wealth