4.6. Outlook of domestic price of four major crops

Prediction of domestic prices for soybean

Historical domestic prices of soybean from June 2007 to June 2017 were analyzed based on the theory of the price spiral mode (PSM) (Fang, 2011) and the historic ratio of world soybean consumption to global soybean production (consumption ratio). According to the data for the last six months, the soybean international consumption ratio is at equilibrium. Domestic soybean prices are also at equilibrium, but fluctuating around the trend line. Domestic prices for soybean will continue to fluctuate.

Figure 4.19. Fluctuations in soybean price, June 2007 to June 2017

Prediction of domestic prices for paddy rice

Using again the price spiral model and now combining it with China's paddy rice consumption ratio, the trend of the domestic price of paddy rice from June 2007 to June 2017 can be analyzed. From 2009 to the end of 2015, price and consumption ratio are rising in sync, and according to the latest data, paddy rice prices are at equilibrium. It is assumed that the paddy rice prices will have an upward trend, which results from the obvious decrease of the domestic paddy rice inventory. In the end, the price will reach a non-equilibrium interval according to the helical model.

Figure 4.20. Fluctuations in paddy rice price, January 2005 to June, 2017 (left) and Chinese rice inventory chart (right) 

Prediction of domestic prices for maize

Domestic prices of maize from June 2005 to June 2017 were also analyzed using the same method. As predicted in previous bulletins, prices are now high, and the maize inventory has hit the lowest value of the last ten years, which will lead to a price increase. 

Figure 4.21. Fluctuations in maize price, June 2005 to June 2017 (left) and Chinese maize inventory chart (right)

Prediction of domestic prices for wheat

Finally, the analysis covered the domestic prices of wheat from January 2005 to June 2017, using again the model and China's wheat consumption ratio. The wheat price is going down, while the consumption ratio is at a low level. Wheat prices and consumption rates are expected to be in the equilibrium range and the price will keep going down.

Figure 4.22. Fluctuations in wheat price, January 2005 to June 2017