The end of the edible oil price limit period will end the major brands brewing price increase

The National Development and Reform Commission said that the end of the edible oil price limit period has spread like wildfire, but it has not been formally confirmed by the NDRC. The major edible oil brands are ready to raise their prices, and no one has the guts to be the first to rise. How long can the price of edible oil be stretched?

High costs caused overall losses to the industry Since December last year, despite the continued increase in the costs of soybeans, crude oil and manpower, under the interview of the National Development and Reform Commission, Yihai Kerry, COFCO, China Textile, and China Textile Group accounted for more than 60% of the market share. The end price of cooking oil for large enterprises such as Jiusan Oil is no longer rising, and the limited price of edible oil has lasted for half a year.

A brokerage research report pointed out that as the price limit continues, the terminal oil price stagnation is gradually transmitted to the refined oil sector. In the crushing stage, crushing profits have been negative for 5-6 months. Even if enterprises adopt the hedging model, crushing profits have also fallen to low levels.

Some soybean processing companies that did not lose money in the financial crisis in 2008 had unprecedented losses. Dongling Grain & Oil (000893), which had a profit of nearly 200 million yuan in 2008, suffered a total of 90 million yuan in losses in the second quarter of this year. After offsetting the profit in the first quarter, it lost a total of 75 million yuan in the first half of the year. The company stated that the main reason for the loss was due to the fact that the cost of finished products imported from soybean processing was higher than the domestic finished product market price.

Statistics show that at present domestic enterprises that use domestic soybeans for crushing can maintain a profit of about 60 yuan per ton of soybeans, but such enterprises account for a small proportion in the industry; and a large number of imported soybeans are used as raw materials for crushing and producing oil plants. The net loss of basic soybeans per ton is about 210 yuan, and the industry’s overall loss time has lasted for half a year, with the highest loss being around 300 yuan.

Jian Aihua, a food industry researcher at China Investment Advisors Co., Ltd., said that there is an “upside down” phenomenon in the current market, with peanut oil “upside down” being the most obvious phenomenon. Last year, the price of peanuts was listed at around 8,400 yuan per ton, but the price of peanuts currently used for oil extraction The price of peanuts as a foodstuff rose to over 10,000 yuan per ton and reached a maximum of 15,000 yuan per ton. The price of peanuts almost doubled compared to last year. This was exacerbated by multiple factors such as labor costs, logistics, and inflation. The most direct solution is to increase the price of the end product, and secondly, to reduce the loss by reducing the product line. ”

Lu flower prices "return"

In the wake of rising domestic prices and rising costs, domestic oil companies have complained that their limit of edible oil prices has lasted for half a year. With the limit order expired at the end of June, the market sent a message in mid-July that Luhua will increase its peanut oil product price by 5%-8%. This reporter learned that some supermarkets received notifications of price increases from suppliers.

However, Lu Hua then stated that the peanut oil price increase was a misrepresentation. The so-called price increase was due to bundling sales and presented a small bottle of sunflower oil. The actual price of peanut oil has not changed. At the same time, the company also stated that it has explicitly forbidden to increase the price of small packaged cooking oil.

Related reports said that for the recent price increase of peanut oil in Luhua, the relevant person in charge of the price division of the National Development and Reform Commission responded that the previous ban on the price of edible oil had indeed been lifted. The person in charge said that the price of finished edible oil is affected by the international market and fluctuations are normal. However, if there are large fluctuations, the state will regulate it.

Everyone is afraid that when prices rise,

The rumors of “Luhua price increases” also reflect the strong urge of companies to anxious price increases. Recently, the market once again reported that Fulin Food Edible Oil of Golden Dragon Fish and COFCO Group of Yihai Kerry had submitted a price increase application to the National Development and Reform Commission. However, the authenticity of the above rumor has not been confirmed by the relevant parties.

“The Luhua incident is a good example. In the future, Lu Hua and other edible oil companies should carry out price increases. It is only inevitable that pressure has recently been put on hold by public opinion pressure. Such policies are not so tight, and they will definitely increase prices again. "There are people in the industry who advise oil companies not to be the first "bird of prey" at sensitive times.

A person in charge of a large-scale domestic edible oil producer told reporters: “There is no price increase plan for the time being. Next, we will pay close attention to the market situation.” This was interpreted by the industry as “wait and see”. In fact, at this stage, “thinking to rise” is already the common impulse of domestic edible oil companies, but no one has the guts to be the first to rise. This is what Luhua raises its price.

The reason why enterprises dared not rush to increase prices was not just the NDRC's interviews. In addition, the reporter noted that the State Council announced the revised “Provisions on Administrative Penalties for Price Violations” on 10th, 2010, and increased the statutory price for non-execution. The penalties for interventions or emergency measures have been increased from the current RMB 1 million to RMB 5 million.

The NDRC abolished the restriction by default?

In late June, the National Development and Reform Commission once touched the national edible vegetable oil stocks. At that time, some experts estimated that the country would formulate a new edible oil control policy. But so far there is no below.

The news that the price of edible oil will be “relaxed” from August onwards has recently been buzzing. "Since we have reached the deadline, no new policy is announced, which means that the National Development and Reform Commission has been lifted by default," said Wang Yaling, an oil and gas analyst at Huaan Futures.

At present, all parties to the market have not received formal notice from the National Development and Reform Commission to lift the limit order. According to industry insiders, after the expiration of the price limit order, the National Development and Reform Commission did not explicitly request an extension. This is a default release.

However, the relevant analysts said that the country's just-completed inspection of edible oil stocks found that inventory is still relatively abundant, so the country still tends to regulate the price of oil through the orientation of edible oil.

The market stated that the country will further target 4 million tons of soybeans to large-scale oil processing companies. Industry sources said that 4 million tons of soybeans will be equivalent to domestic soybean consumption for one month.

However, when interviewed by the media, Zhao Yan, an analyst of Everbright Futures, questioned this: “The state reserves are in the range of 4 to 5 million tons. If 4 million tons is thrown, the soybean equivalent to reserves will be completely thrown away from the national security reserve. From the perspective of this point of view, this possibility should not be very big, and the last time we planned to throw 3 million tons of oil to the oil plant, but in the end, the oil plant only needs 2.2 million tons. This also shows that the current oil plant is not short of beans."

Collective price adjustment will be inevitable?

Under the background that domestic edible oil has formed an oligopoly industry, the trend of large-scale oil companies is the key. As a profit-oriented company, how long it can be worth paying attention under cost pressure.

According to Guo Qingbao, editor-in-chief of China Fatty Net, according to the current cost of imported soybeans and the price of soybean oil, processing companies will lose about 200 yuan per ton of soybeans. A number of industry sources said that the increase in price of Luhua Peanut Oil is only the first step in compensating for domestic edible oil prices. In the future, once the price limit is lifted, it is expected that the prices of edible oil including soybean oil, corn oil, etc. will be launched in succession. .

It is understood that the expiry of the edible oil limit has expired more than a month, but the edible oil prices are slowly rising. As can be seen from the data on edible agricultural products monitored by the Ministry of Commerce (000061), of the three major edible oils, peanut oil has risen for nine consecutive weeks since May, and rapeseed oil and soybean oil are also in an overall upward trend. According to the latest monitoring data from the Ministry of Commerce, between June 27 and July 3, the retail price of grain and oil rose steadily, and rapeseed and peanut oils rose by 0.3% and 0.1% respectively. Soybean oil was basically the same as the previous week. The Ministry of Commerce's Market Operation Division released the current business forecast: last week, the domestic retail price of edible oil rose 0.6% from the previous week (the same below), among which the retail prices of peanut oil, soybean oil and rapeseed oil rose by 1.1%, 0.4% and 0.3% respectively. .