Chapter 106 Food War: The Hidden Weapon Behind the Pillar of Hegemony Jiusan Grain and Oil is one of the country’s first 151 key leading enterprises in agricultural industrialization and will also be the largest domestic soybean crushing enterprise in the future. In later generations, it is often called the largest national oil and fat processing enterprise. In the past two years, Jiusan Group has attracted attention from the outside world for its insistence on processing local non-GMO soybeans. But in fact, this company has recently fallen into a dilemma facing the impact of genetically modified soybeans. Shi Chao walked into the boss' office with a heavy face. "Chairman, here is an article. I think it would be better for you to take a look at it yourself." "Oh?" The chairman's name is Xue Liqiang, a middle-aged man in the prime of life. He is tall and thin, but has a relatively dark skin. He took the newspaper from the visitor out of curiosity. The first thing that catches your eye is the huge title - Food War: The Secret Weapon Behind the Pillar of Hegemony! Just by looking at the title, Xue Liqiang felt a murderous aura coming towards him.
Moreover, considering the difficulties that the Jiusan Group was facing, he vaguely felt something and couldn't help but read it carefully. The article takes "cars and pigs" as the entry point and starts with the rise of biodiesel and bioethanol companies around the world. Since 1978, US President Carter has ordered ADM to conduct research on biofuels, which has continued to this day. As technology continues to advance, large amounts of corn and soybeans are consumed as bioethanol and diesel. Corn exports from the United States, which accounts for 70% of the world's total trade volume, have dropped significantly, causing corn futures prices and feed prices to soar. Finally, it was passed on to the price of pork. The rise in pork prices is caused by oil. Xue Liqiang smiled knowingly. The angle of the article was quite interesting. The food war between cars and pigs was really novel. But the following content made him more interested. Xue Liqiang, who was originally leaning back in the boss chair, sat up straight with a look of surprise in his eyes. As the article progresses, the four major grain traders are constantly mentioned. ADM, Bunge, Cargill, Louis Dreyfus. As one of the leading grain and oil processing enterprises in Northeast China, Jiusan Group has just completed its expansion within the province this year, and its organic agricultural product bases cover the entire province. We are currently planning to move beyond Heilongjiang, move toward the coast, and integrate into the world. In fact, we had already taken the step of cross-border trade two or three years ago. There are also plans to build a factory on the coast, but the purpose is to build an organic product processing and export base. In the past two years, Jiu San's organic agricultural products have been very popular overseas, and the red kidney bean varieties introduced and planted from Xiao Rizi have been fully sold by Japanese businessmen. European countries and the Gulf region are particularly fond of organic soybeans This is also an important magic weapon that enables the Jiusan Group to survive the attack of genetically modified soybeans. Therefore, Xue Liqiang believed that he had a certain understanding of multinational grain traders. But it was not until then that he realized that what he had learned was only the tip of the iceberg. The article gives a detailed introduction to the four major grain traders.
ADM, founded in 1902, has revenue of more than $500 billion and a vast network of relationships, which made Xue Liqiang understand the meaning of the title of the article. Powerful figures who have a direct relationship with the development of ADM include government heads such as Carter, Reagan, and Bush Jr., financial giants such as Buffett's son, foreign government officials such as the Canadian Prime Minister and Argentine government ministers, and industrial giants such as DuPont Group and Procter & Gamble. However, even so, ADM ranks low among the four major grain traders. Bunge, founded in 1818, entered China in 2000 and is currently the largest soybean importer in the country. Louis Dreyfus, founded in 1851, is the world's third largest grain trader and the grain trader with the deepest presence in China. It made its first business in China in 1973 and is the foreign-invested group with the most say in the domestic agricultural futures market. Cargill, founded in 1865, is the world's largest grain trader! Currently, it has many crowns on its head: the world's largest private holding company, the world's largest grain trading company, the world's largest livestock breeding company, and the largest corn feed processor in the Americas... Its annual revenue is nearly $500 billion, ranking higher than Citigroup, Samsung, Nestle, JPMorgan Chase and Berkshire Hathaway in the Fortune Global . It is the most low-key of the top 50 global companies! However, such a multinational group has not yet been listed. Perhaps, keeping a low profile is also a strategy. The most secretive thing is Cargill's senior management team. The detailed background and employment information of its senior management are completely unknown! The four major grain traders' long development history, exaggerated financial strength, and global industrial layout are daunting! Xue Liqiang suddenly remembered Kissinger's words, "If you control food, you control all mankind!" What is frightening is that three of the four major grain traders originated in the United States, and the only exception, Louis Dreyfus, also has close ties with the US government. The country on the other side of the ocean is the one that truly holds the lifeline of global food! Sure enough, the article then went on to introduce how America used food weapons to dominate the world. At the end of World War II, food shortages were a common phenomenon around the world, and millions of people in Europe were suffering from hunger. At this time, America appeared. Supplying food on credit to France and Italy to prevent them from turning to the Soviet Union; At the same time, in order to contain the Soviet Union's southward advance, the United States provided food aid to Pakistan when it suffered a drought. However, neighboring India was not so lucky and had no chance to become a lackey. The United States has gained a large number of followers by relying on food and has caused trouble all over the world. However, if you want to eat other people's food, you can't smash other people's pots. Before the collapse of the Soviet Union, the socialist countries in Eastern Europe gained nothing. As time goes by, America's food weapons are constantly being updated. In 1985, the United States lowered the price of rice from 16 cents per pound to 8 cents. American farmers had subsidies to cover their expenses, while Thai farmers had to stop production and sell land. In 1996, Argentina, which was plagued by a debt crisis, came up with a new idea: selling soybeans, genetically modified soybeans. American companies such as Monsanto and the four major grain traders began to enter Argentina. Within a few years, local agricultural companies in Argentina, Brazil, Uruguay and other places went bankrupt in large numbers. Vivid cases were cited one after another. America's food weapons are constantly being updated, including joint embargoes, the use of intellectual property rights as a stick against foreign countries, and large-scale industrial subsidies at home. And now it seems to be the turn of agricultural futures. Using financial markets to control the spot market for agricultural products has always been an important means for the four major grain traders.
However, China's Dalian Commodity Exchange and Zhengzhou Commodity Exchange are obviously not yet mature. To some extent, it has become an excellent tool for grain traders to achieve their own goals. The article takes soybean futures as an example, emphasizing that the domestic soybean industry is already in danger! The country does not have the pricing power over international grain prices, and this is precisely the ultimate weapon of the four major grain traders! The world's most developed agricultural futures trading center is in Chicago, which provides a price benchmark for American and global agricultural products. A key factor affecting Chicago futures prices is the various reports and speeches released by the . Department of Agriculture! The US government can influence global agricultural product prices just by talking! Since the end of 2003, international funds have been buying large quantities of soybeans in Chicago. The . Department of Agriculture continues to lower the production of American soybeans! The few bold black characters irritated Xue Liqiang's nerves, making him terrified and sweating coldly! False statement! False report! Xue Liqiang looked up at his assistant in astonishment, "Xiao Shi, find the monthly supply and demand report released by the . Department of Agriculture in recent months!" Shi Chao handed the information in his hand to the chairman, "I have verified it. Since August last year, the . Department of Agriculture has continuously lowered the . soybean production and ending inventory due to weather reasons, while predicting an increase in domestic soybean imports!" Xue Liqiang murmured to himself, "The price was too high in the early stage, and many manufacturers are waiting and watching." Shi Chao went on to say: "Before, there was pressure from above, but now the policy has been relaxed." Xue Liqiang suddenly thought of something. Since October last year, domestic new beans have been supplied to the market in a concentrated manner and the price should have been weak. However, affected by the international market, the domestic soybean purchase price has also soared amid the rush to buy! Now the price of soybeans has risen to 4000 yuan per ton! However, the . Department of Agriculture is still lowering its production expectations. Under the influence of asymmetric market information, international grain traders and fund organizations deliberately mislead domestic enterprises, causing purchasing behavior of "buy high and not buy low". Just like stock trading, chasing highs and selling lows is the standard behavior of leeks. Not only was there worry between the lines of the article, but Xue Liqiang became more and more frightened the more he read! What if it is really false information? The article suggests that if you must import, remember to reserve funds for planning and do a good job of hedging in the futures market to hedge risks! He couldn't help but look at the signature - Tianhe Seed Industry. "Tianhe Seed Industry? I've never heard of this company in the industry. Where did it come from?" Shi Chao shook his head. "Tianhe Seeds was established just over a year ago. It mainly deals in pepper seeds. This year, the pepper industry is very popular." “No soybean seeds?” "The newspaper left their contact information, and I asked about it. I heard that they will soon launch soybean varieties." "Oh." Xue Liqiang was silent for a while, tapping his fingers gently on the nanmu desk. “Do you think this article is credible?” Shi Chao had no answer. In the past two years, the Jiusan Group has opened up channels for overseas trade.
Since the soybeans of Jiusan Group obtained the international organic product certification, they have been exported to countries and regions such as Japan, Germany, Britain and the Gulf. This is ironic, to be sure. Organically certified soybeans are exported abroad, but genetically modified soybeans are imported into the country. "Why don't we ask the foreign businessmen we cooperate with?" "It can only be the." Xue Liqiang sighed helplessly: "The . Department of Agriculture is the main source of international soybean market information. We have been relying on it to release global soybean basic data for free to make purchasing decisions. This is indeed too risky." "Have to guard against it." Not long after, Shi Chao obtained some useful information from foreign businessmen. "Some foreign businessmen have suggested that we hold off on building factories along the coast." "The reason is that among the four major soybean producing countries, we are the only one that produces soybeans that are not genetically modified, and they still want to eat high-quality soybean products." Xue Liqiang pondered for a while. As international soybean prices strengthened, domestic soybean farmers became very reluctant to sell. "Then just wait." If international grain traders and the . Department of Agriculture are really working closely together, soybean prices will definitely come down. …… Not only the Jiusan Group, but many domestic soybean companies have seen this report. But many private enterprises do not think so. There has been a lot of discussion about genetically modified soybeans in the country, but hasn’t it been relaxed now? As for the . Department of Agriculture’s cooperation in releasing false information, it has lowered production expectations for six consecutive months. Could it be all fake? At most, the production reduction was not that much! In the end, 97 large domestic processing companies, including Huanong, Jinshi, Fuhong, Rizhao Oil Factory, Heze Oil Factory, Yangjiang Fengyuan Group, and Qinzhou Dayang Oil Factory, formed a group to import large quantities of soybeans at high prices, as if history was repeating itself. As for hedging, some companies listened to the advice and invested part of their funds, but many companies just stayed out of it. China National Grain Group. "Leader, we have investigated clearly. Since the beginning of the year, soybean stocks have been piling up at some domestic ports, but many companies are still following each other and chasing high import prices." "Ah." "What are we going to do?" How to do it? The leaders don’t know either. Regardless of whether the United States has released false information or not, it has been protesting with its followers, holding the big sticks of tariffs and quotas in its hands, which may fall at any time. What's more, these companies are like the leeks in the A-share market. They have gone crazy long ago when they encountered a bull market. We can only save a part of it. "Reply to the higher-ups. According to Tianhe's suggestion, all enterprises within the system that import soybeans are required to hedge in the futures market." “Businesses may not have that much money.”
"Even farmers in the three northeastern provinces know how to hedge risks in the futures market. If they can't do that, even gods can't help if something goes wrong." “Business is a war without gun smoke!” At least this time we have seen clearly their tricks. The leader's eyes stayed on the end of the article: The key to breaking the monopoly of the four major grain traders is to develop the country's agricultural production and improve agricultural productivity. However, the domestic soybean industry has a natural defect: the demand is huge, but there is a shortage of arable land. Based on the current demand for soybeans, if we want to be self-sufficient, we need to set aside 7 million mu of land to grow soybeans. This is totally unrealistic and affects the security of staple food. But what if international grain traders target domestic wheat? The leader could not help but feel deeply moved. The four major grain traders! To be honest, after hundreds of years of ups and downs and surviving many wars, there is much that Chinese companies can learn from it. China really needs such national enterprises. Once we lose control of agriculture, we lose the right to set prices for agricultural products, and thus lose much more. …… at the same time. After giving the written article to Xie Shijie to contact various major industry newspapers and magazines, Guo Yang went into seclusion on his own. That is, the targeted breeding of soybean seeds. The first to be affected is soybeans, and there is no need to worry about red grade seeds. But with 291 points of natural energy in hand, he had to get some purple-level soybean seeds. (End of this chapter)