Chapter 320: Cooking Oil Price Increase

The 08 Olympics was a huge event.

It is difficult for past and future Olympic Games to compare with it, and even more than ten years later, it is still often brought up for comparison.

The participating athletes, media reporters and spectators from all over the world are the best opportunity for Hexi Dairy to implement its globalization strategy.

The Olympic Games platform can be used to promote a wave of products, and Liu Xiang's performance in the Olympics can drive another wave of sales.

At this point the investment is worth it.

...

The business section meeting has ended.

On September 2, people from the natural environment restoration section arrived at the headquarters one after another.

Shahai, Qinghe, Falcon, Xiangyang Lake, and Muhe will also participate.

When Guo Yang walked into the conference room, Lu Hanbin, Bao Xinyu, Xie Shijie, Ye Sheng, Zheng Wang and others were already there.

Everyone was playing with stones.

"Today is really a landlord's meeting. Everyone is playing with ornamental stones. There are so many in the Gobi Desert. We can pick them up anytime!"

"It's quite interesting, brought by Lao Bao."

Guo Yang looked at Bao Xinyu and said with a smile, "Are you bringing stones instead of camels this time?"

"I also brought some camel jerky." Bao Xinyu also handed three stones to Guo Yang.

"Boss, this is for you. Agate, jasper and yellow wax are all specialties from Agate Lake."

Guo Yang observed it for a moment and found that the color and shape were very unique, and it was a rare treasure.

Bao Xinyu continued: "There was a drought some time ago and locusts appeared in Urat. Fortunately, the drone discovered them early and suppressed them in time."

"Then the local government sent some stones over, and I happened to bring them here this time."

"Okay, I'll take it." Guo Yang sat down, "Let's have a meeting first, landlords."

Judging from the area alone, it is no exaggeration to say that these people are landlords.

沙海115万亩荒漠，青禾200万亩戈壁草原，猎鹰60万亩草原，苜禾30万亩戈壁+100万亩盐碱地+40万亩苜蓿。

The total is 545 million mu, which is approximately one-fifteenth of the Great Northern Wilderness.

Guo Yang said: "In the beginning, these lands were not good farmland, nor were they good grasslands and forests."

"But after several years of hard work, the results are visible. The saline-alkali land has turned into fertile soil, the desert has turned into forest land, and the degraded desert and Gobi have become grasslands with herds of cattle and sheep."

“Now is the time to reap the fruits.”

The Cistanche deserticola in Shahai, the cattle and sheep in Qinghe and Falcon, and the tourist resources of Qinghe, Shahai, Falcon, Xiangyang Lake and Muhe.

These are all ways to monetize.

Guo Yang also reviewed the development ideas of the entire industrial chain with everyone again.

Everyone expressed their opinions.

Adequate preparation and intensive thinking during this period have made Guo Yang familiar with the entire industrial chain.

Under his leadership, the development ideas of each company were easily sorted out.

Qinghe still follows the organic route, and beef, mutton, storable vegetables, sea buckthorn, and fresh corn are its main products.

Shahai focuses on Chinese medicinal materials such as Cistanche deserticola and licorice, supplemented by hemp and honey...

In addition to cooperating with Hexi Animal Husbandry, Falcon also has to take into account the breeding of ordinary beef cattle and sheep. At present, the main focus is on breeding, but processing must also be prepared early.

In addition, they will jointly establish a travel company to develop their tourism resources, including Dunhuang West Lake and the future National Desert Park. The travel company plans to seek a listing.

As the process was being arranged, Lu Hanbin couldn't help but ask, "What about the ecological management of the sand sea? Are we going to Dunhuang?"

Guo Yang glanced at Lu Hanbin's dark face and said with a smile, "Are you addicted to it?"

"I am not very good at running the company's business. Sand control is more suitable for me."

“You need to learn everything.”

Guo Yang pondered for a moment and made the most important decision of the day.

"The group will set up a separate ecological environment management company to be responsible for the ecological restoration of the national desert park."

"The main personnel will be drawn from Muhe, Shahai, Falcon, and Qinghe, but we will not force them, and they will mainly come on a voluntary basis."

If it were just the Dunhuang wetland, alfalfa would be enough.

But the national desert park is too large, covering a wide variety of terrain and landforms, and alfalfa may not be able to withstand it.

Think about it.

The correct solution is to integrate the best talents in all ecological restoration fields of the group.

However, the natural environment restoration sector has had a hard time in recent years. Now that the environment has improved, the benefits are beginning to be seen.

Forcibly transferring people at this time will cause some adverse effects.

So, voluntary.

Lu Hanbin didn't hesitate, "Then count me in and sign up in advance."

Guo Yang hesitated. He didn't know whether it was a good thing to let Lu Hanbin stay in the desert for a long time.

In addition to spiritual needs, people also need to enjoy life. Lu Hanbin is a bit too extreme.

"We can talk about this after the project investment agreement is signed. Let's go back and find out the bottom line first."

"The preliminary work can be handled by the Alfalfa Engineering Department."

Lu Hanbin nodded, as long as there is a chance.

After all, the 100 million-acre desert project in the Badain Jaran Desert has not been completed yet, let alone connecting with Jinta to blockade Badain Jaran.

After a series of meetings, Guo Yang finally accomplished something that he had been worried about.

Today's Jiahe, if divided into more detailed sections, has more than twenty sections.

Alfalfa, Tianhe, Denong Agricultural Materials, Fengkai, Donghe, Hexi Dairy, Hexi Animal Husbandry, Quanwang Biological, Jiahe Grain and Oil, Jiahe Supermarket;
Sand Sea, Green Grass, Falcon, and Sunny Lake;

Huinong.com, Weiguang (Blue Star), and Jiahe International;
In addition, the existing biochemical energy division, future ecological environment restoration, wines and beverages, and seafood will be listed separately.

Jiahe Nutrition and Health Research Institute may also give rise to Jiahe Food.

In addition to each subsidiary, there are also some overseas branches.

In this way, an agricultural industry group with agriculture, forestry, animal husbandry and fishery as its core was initially formed.

In the future, some peripheral companies can introduce more partners or go public to form a deeper moat.

...

The ship was in trouble and turned around.

The concentrated shareholding of Jiahe has disadvantages, but it also has advantages, as it makes adjustments easier.

For example, national grain is not acceptable.

At that time, the national grain supply was also huge.

Took over Tunhe in Xinjiang Province from the Delong Group and entered the tomato paste and beet sugar processing industries;
Holding shares in China Resources Biochemical, China Resources Alcohol and Jilin Fuel Alcohol, entering the fuel ethanol industry;

Acquired Shenbaoheng and changed its name to Guoliang Real Estate, entering the real estate industry;

With the holding of listed company Fengyuan Biochemical, the biomass energy platform of China National Grain Group has taken shape.

There are state-owned enterprises, private enterprises, joint ventures, and overseas institutions, with their subsidiaries being intricately interconnected. Every reform of these giants is like a giant dragon turning over.

At the same time, debt ratio and management risks also rose rapidly.

Jiahe’s mergers and acquisitions are not that aggressive. Its main businesses are based on itself, and external acquisitions are only auxiliary tools.

Although it's a bit slow, it's very stable.

Guo Yang believes that there is no need to rush, as it will take some time for the advantages of upstream animal and plant varieties to be transmitted to downstream products.

But he soon stopped thinking so.

……

"Boss, the price of edible oil has been rising frequently recently. The National Development and Reform Commission sent a letter of interview, hoping to keep the price of edible oil stable."

After hearing Gao De's voice, Guo Yang was stunned. "Aren't soybeans about to be harvested in autumn?"

Gao De said: "The cost of raw materials is too high. The prices of peanuts and imported genetically modified soybeans have been rising. Oil companies have very low profits, so they have no choice but to raise prices."

"Let's have a talk then." Guo Yang said, "It shouldn't just be Jiahe Grain and Oil, right?"

Gao De smiled bitterly and said, "Jiahe is just a byproduct. This time, Luhua took the lead, followed by Jinlongyu and Fulinmen."

"okay, I get it."

After hanging up the phone, Guo Yang asked Ning Xiaojing to collect relevant information.

In a short while, I collected a lot of them.

Media such as Yangcheng Daily, Grain and Oil Market News, Securities Daily, and International Business Daily have successively reported on changes in the edible oil market.

“Import costs have skyrocketed, and the price of edible oil feeders has increased.”

"A new wave of price increases is brewing for edible oil."

"Food price transmission: Jinlongyu and Fulinmen are planning to raise prices by 10%."

"Edible oil prices have skyrocketed in various provinces, and citizens are rushing to buy them after hearing the news."

After spending some time and quickly reading a pile of information, Guo Yang had an idea in his mind.

As a rule, the off-season for edible oil consumption is from after the Spring Festival to August and September.

But this year's market is a bit weird.

Guo Yang still remembers that when he was still in Guangdong Province in May and June, the price of edible oil soared against the trend.

This is an increase of nearly 15% compared to the same period last year.

The prices of cooking oil in major supermarkets have been rising step by step, and citizens have been shouting "it's too expensive".

It was also the increase during that period that brought Jiahe Grain and Oil's soybean processing close to breaking even.

But this time, the industry leader took the lead in raising prices again.

The product with the largest increase was Luhua peanut oil, with the retail price of a 5-liter bottle raised from 80 yuan to 105 yuan.

Brands such as Golden Dragon Fish and Fortune also raised their prices by 10~20%.

Jiahe also followed suit and raised its price slightly.

The increase is due to the rising costs of raw materials such as peanuts, soybeans and rapeseed.

In theory, price increases are a good thing, which is in line with Jiahe's current strategy in the futures market, and soybean processing is gradually becoming profitable.

They are all making money!
Guo Yang was not very happy.

"If you don't have a say, you not only don't feel like you're participating, you're like a fish on the chopping board."

Wilmar International, Guoliang and Luhua together account for 60 to 70 percent.

Wilmar International and Guoliang have been entangled with each other for a long time, from cooperating to establish Golden Dragon Fish to breaking up and opposing each other now.

Wilmar International Holdings Group, a joint venture between ADM and Wilmar International, has a stake in Luhua.

Among the three, it seems that Luhua raised prices due to the sharp rise in peanut raw materials, and brands such as Jinlongyu and Fulinmen followed suit.

Maybe there is a connection behind it.

The pricing power of edible oil has been lost.

……

Guo Yang pondered for a while.

The rising costs of raw materials such as peanuts and soybeans are a market behavior, and the terminal cannot survive without raising prices.

There are also means of regulation. Since the autumn harvest has not yet begun, the sale of state-owned grain reserves can stabilize grain and oil prices to a certain extent.

But once again chose to have a talk?
The specific purpose is intriguing, and Guo Yang does not know.

If it is just a talk, it will not have any impact on the company.

The facts turned out to be just as Guo Yang expected.

In the next two days, companies such as Wilmar International, Guoliang, Luhua, and Jiahe were summoned for talks one after another.

But we had a meeting a few months ago and agreed upon it, but in the end the price kept going up.

This time, several companies did not agree.

Just afterwards, Guo Yang even saw a report: It is difficult to stop price increases by just talking about it on paper.

"If we need to talk to the companies about the price increase of edible oil, why don't we talk to the 'three oil companies'?"

There was a lot of discussion in the media.

"Transnational grain traders are calling the shots, and edible oil prices are rising everywhere."

“Who is behind the rise in edible oil prices?”

"Behind the surge in edible oil prices, are foreign investors manipulating pricing power?"

After experiencing the turmoil in 04, there is no shortage of professionals in the country who have conducted thorough analysis of the domestic soybean industry.

The mystery of the four major grain traders has long been unveiled.

Among the 97 large oil processing plants in China, more than half are controlled or invested by foreign capital.

85% of the trade volume of imported soybeans is controlled by the four major grain traders.

The raw materials are from abroad and the processing is done domestically. How can we fight against this?
According to professionals’ analysis, the reason for the rise in edible oil prices is that the raw materials, processing and supply are controlled by others.

“Downstream brands like Golden Dragon Fish earn their money through hard work.”

"International grain traders are squeezing companies' profits lower and lower."

"The terminal price increase has not led to an increase in the profit of the planting end. The profit is all in the trade."

Some remarks have attracted social attention, and the public has also paid attention to the rising prices of edible oil.

Under such circumstances, the State Grain Reserve took action.

First, 10 tons of rapeseed oil were put into the market, but the effect was not ideal, giving people a feeling of lack of confidence.

Subsequently, it was announced that 30 tons of national oil reserves would be released into the market to stabilize prices.

As if to say: "Come on."

Guo Yang was amused by this attitude.

“There’s something about this operation.”

The market also had positive feedback, and the price of edible oil stabilized, but it did not fall much.

But the media are still paying attention.

This time the analysis focused on grain trade.

Unlike the national grain, the national grain reserve has weaker economic strength and is not even among the top 500 companies in China, but it has a stronger official color and bears the main regulatory tasks and responsibilities.

Generally speaking, national grain reserves do not involve the manufacturing of products, but only the purchase, sale and storage of grain.

The company is the world leader in warehousing.

But there is almost no flour, rice processing, soybean crushing and corn processing.

A media article stated:

"The hardware facilities of the National Grain Reserve are first-class. Although the overall economic strength is still far behind that of the National Grain Reserve, it ranks first in the country in the field of grain circulation, especially in the fields of grain procurement, storage and sales."

"However, several major multinational grain traders have accelerated the allocation of grain and oil production, processing and trade resources on a global scale. After occupying most of the market share in my country's oil and fat sector, they have begun to expand their domestic grain trade business and get involved in my country's grain sector at a deeper level. This is driving the adjustment of my country's grain circulation pattern."

……

“How should the national grain reserves respond to new challenges?”

Yang Heng and Qi Zihua from the project team asked Guo Yang this question when they were reporting on their work.

"Challenge?" Guo Yang chuckled. "Don't be misled by the media. There are risks, but they are not that serious."

“No one knows how much grain is stored in the national grain storage warehouses.”

"What about soybeans?" Yang Heng asked, "The domestic soybean production this year should be OK."

Yang Heng participated in the formulation process of the soybean subsidy policy on behalf of Jiahe.

Direct food subsidies will certainly boost enthusiasm for soybean germplasm.

What's more, the soybean planting area in coastal saline-alkali land and the arid area of ​​northwest China is also increasing rapidly under the leadership of Jiahe.

Therefore, Yang Heng predicts that the domestic soybean output this year should be good, but the market seems to turn a blind eye to this.

Guo Yang smiled and said, "This is related to the layout of the entire industrial chain of international grain globalization."

The term "entire industrial chain" has been mentioned frequently in Golden Harvest recently, but when it comes to the global context, few people can fully explain it.

"Do you know their operating methods and procedures?"

Yang Heng and Qi Ziwen shook their heads.

Guo Yang said: "Actually the logic is not difficult."

"International grain traders have long controlled the soybean industry chain in North and South America, controlling more than 70% of the world's soybean supply and dominating the global soybean trade."

"Before that, multinational grain traders' operations in China eventually led to a layout where raw materials were produced abroad and processing was done in China."

"These grain traders sell soybeans at low prices to their trading companies, which are usually registered in tax havens such as the Virgin Islands and Singapore."

"Then the soybeans are sold at a high price, transferring the profits from the production and processing stages to the trading stage."

"In the process, tax avoidance can be easily achieved."

"In this way, international grain traders transfer production profits to avoid taxes in soybean exporting countries on the one hand, and transfer processing profits to avoid taxes in soybean importing countries on the other hand."

“Therefore, although the profits of foreign-funded squeezing enterprises are not high on the surface, they have actually transferred the profits through their global industrial chain.”

Yang Heng and Qi Ziwen listened attentively to the analysis.

Now it all makes sense!

But that’s not right either.

Yang Heng asked: "Why are prices being raised so frequently this year? Isn't this giving other processing companies a way out?"

"Everyone wants to make more money!" Guo Yang said with a smile: "This is in line with the international situation. After this period of time, there will be another big price cut, and a number of newly built processing plants will go bankrupt again."

The two of them shuddered.

Thinking back to the soybean incident a few years ago, it was caused by multinational grain traders importing large quantities of low-priced soybeans.

In fact, Guo Yang has not mentioned the most vivid example yet.

Just over a decade later, Golden Dragon Fish's annual revenue reached 2500 billion yuan, 1000 billion yuan higher than Moutai.

But MouYu’s net profit margin is only 1.13%.

On the surface, it does not seem to make money.

...

"If we want to change this situation, the most fundamental way is to start with soybean raw materials."

Yang Heng and Qi Ziwen have both reacted.

This is what Jiahe is doing, improving saline-alkali land and cultivating high-yield soybean seeds.

If the country can be self-sufficient in soybeans, all the tricks of multinational grain traders will be useless.

Yang Heng said: "The reason why the market has not responded yet is that there is still a gap in production and it will take time to react."

Guo Yang smiled and said, "During this period, there should be a lot more people doing research in major soybean producing areas."

"Let's go, Director Lu is waiting, let's go and see how the soybeans are growing."

...

Northwest of Jinta.

In the saline-alkali land soybean base.

The soybeans that are about to mature are tall and straight, with abundant fruits, and strings of plump pods come into view.

Who would have thought that a year ago, beneath this lush green background there was once white saline-alkali land.

After plowing in winter and spring, the sown Tiandou No. 7 (soybean seeds for the arid areas of Northwest China) grew vigorously.

"It's hard to estimate the yield. No one around here has ever grown soybeans before, and there are very few people growing soybeans in the northwest."

In the field, an experienced technician from the Agriculture and Forestry Bureau said so.

"But judging from the situation, the yield can't be low. It must be at least 400 kilograms, right?"

Guo Yang said: "400 kilograms? The minimum goal is 550 kilograms, and if we go higher, we will have great hope of breaking through 600 kilograms."

"600 jin, can it be that high?"

"Didn't it say in the variety approval that the yield per mu is 550-650 kilograms?"

On the side, Lu Yilin from the Municipal Agriculture and Forestry Bureau couldn't help but ask, "There should be a difference between the experimental field and the field, right?"

"600 kilograms is just the average value." Guo Yang said with a smile: "Looking at the condition of the bean pods, there is no problem."

It is indeed difficult to estimate with the naked eye.

However, by counting the number of pods per plant and combining this with the dry grain weight, it is easy to estimate the result.

What's more, the reference yield is provided by the seed store, and it has been very accurate over the years.

Guo Yang also asked about some data on water and fertilizer consumption, and the performance was very good.

"Xiao Qi, pull up a soybean plant and take a look at the root system and soil."

"okay."

The young man who had just graduated was full of energy and quickly pulled out the soybean plants along the roots.

The main root is well developed and long, going deep into the ground, while the lateral roots are relatively dense.

The roots of soybeans inoculated with rhizobia are covered with spherical tumors, providing the plants with rich nitrogen fertilizer.

But what is most surprising is that the soil has become soft and loose, and the saline-alkali characteristics have disappeared extremely obviously.

Everyone from the Agriculture and Forestry Bureau was dumbfounded.

Lu Yilin immediately decided: "If the yield per mu can really reach 600 kilograms, all saline-alkali farmland in the city is worth promoting Tiandou No. 7."

"The yield per mu is 600 kilograms, and it can also improve saline-alkali land. This is totally worth it."

"There are still more than 50 mu of saline-alkali farmland in Jinta. Now the people have another option for crop rotation."

It is difficult to get a good harvest of ordinary crops, let alone produce seeds, on saline-alkali farmland.

What about growing alfalfa?

Alfalfa No. 1 seeds are expensive and scarce, and there is a general lack of irrigation conditions. Now that the area has increased, the benefits are also declining.

Guo Yang smiled and said, "Wait another ten days or so and we'll have the results."

...

Xinjiang Province, Kashgar, Zepu.

Shen Zhi, general manager of the base, was also at the soybean base, spot-checking the pods, soil, and other conditions.

When he finished his patrol and returned to the base, it was already past nine o'clock in the evening, and there were signs of sunset at this time.

But he has become accustomed to this long-day life.

"Boss Shen, the beer sent by headquarters has arrived today. It's already frozen and we're waiting for you to come back for dinner."

"Oh?" Shen Zhi's eyes lit up. The homemade seafood could be eaten anytime because it was close by.

But Shen Zhi had been itching to try Jiahe Beer after hearing it praised countless times, so he went to the table.

After taking a sip of beer, the unique aroma and bitterness of hops comes to you.

"Cool!"

"Are the soybeans growing well?" someone asked.

"Well, it's pretty good." Shen Zhi took another sip and said, "It's beyond my imagination that the first season can grow like this."

"Yes, we only plowed the land twice, in winter and in spring, and the salinity has not been reduced. It is amazing to have such a harvest."

"Mr. Shen, what should we plant after soybeans?"

Shen Zhi said: "Return the straw to the fields, apply cattle and sheep manure to make it composted, and leave the fields fallow."

"fallow?"

"The boss agreed." Shen Zhi said with a smile: "After applying the fertilizer, you can go home early for vacation and come back next year."

"Really?"

"Fuck, this is going to take several months, right?"

"You can go pick cotton if you want."

After eating, Shen Zhi sorted out the recorded data, edited the information, and then sent it to his boss.

(End of this chapter)