The Chinese Spring Festival has just ended， while the grain war in the international bulk commodity market continues. Rounds of speculation in the financial features market have sparked off another grain war.T e international grain price has been on the rise in months since last year. Figures show that last December the global food price index grew 32% during half a year， a record high since 1990 and even above the level of the 2008 food crisis. And the wheat price doubled.The grain price hike is largely attributed to the extreme weather. Russia curtailed its grain export due to last year’s severe drought， and fl oods gave Australia a poor harvest. T en drought hit the major wheat producing areas of North China， which further pushed up the grain price.However， has adverse weather imposed such a drastic grain yield reduction that sends sharp fluctuation to the grain price? Perhaps what matters are not supply-demand relations. Those having witnessed bull and bear stock markets are quite clear that price signal is nothing more than speculation.In 2008， the bio-fuel plan launched by the US government was the most sensational factoid of the grain market. T e much-hyped ethanol gasoline alternative made from maize is seldom mentioned now， but it did set off grain shortage anticipation worldwide， which then caused great turbulence.Anticipation determines price rather than demand. Venture capital capitalizes on the wave of soaring prices， and “ABCD” (initials of the big four multinational grain dealers) cashes in on monopoly of 80% of the global grain trade. In the mean time， the rising food price worries civilians， and famine breaks out in poor nations wholly relying on grain import. Complaints about rising prices have even provoked regime changes in Tunisia and Egypt.Grain is not in short supply， but people cannot aff ord. Such a price game controlled by fi nancial manipulation has fi rmly held people’s livelihood and grain ration. Although the pretext for this year’s speculation is cliché， hot money in the financial market pours in and prices rise before rumors on grain yield reduction have proved to be true or 1.In the aftermath of the fi nancial crisis， the loose monetary policy across the world released large amount of currencies， in particular the epidemic US dollars. “T e market speculates on crude oil， gold， then bonds， and fi nally grain，”said economist Song Zuo.By the first working day after the Spring Festival， the Central Bank of China has launched three interest hikes since last October. T is macro-tightening signal cooling down the overheated economy triggered immediately a sell-off wave of such bulk commodities as grain and oil in the international market. But shortly afterwards， the UN Food and Agriculture Organization issued a special alert on the status of China’s drought.Almost at the same time the media made prediction that China would have to import large quantities of grain to respond to the drought， which may bring international grain price to a new high in these years. Anticipation once again pushed up grain price.Actually， last year China’s total grain yield hit an all-time high of 546 million tons， a seventh straight production increase for the first time during the past 50 years. China now boasts a grain reserve of nearly 200 million tons. Statistics from the National Development and Reform Commission indicate with a grain inventory/consumption ratio above 40%， much higher than the international safety level of 17%-18%， China can easily meet domestic demands.However， these figures are overwhelmed by bulls of the international grain price or deliberately ignored.T e current distorted global grain production and pricing system is not produced by the market economy， but by monopoly manipulated by the fi nancial magnates. This is a no-blood but more cruel war waged by rich nations to plunder wealth and divert the fi nancial crisis to poor nations via the grain weapon.To some extent， the grain war aims at giving a fatal blow to the emerging industrial nations with deeply fl awed grain supply chain. With stagnant economy， infl ation and social unrest， these nations will surrender and then be tramped to the feet of the multinational enterprises and developed nations.What is weird is that this year’s grain war not only sends fluctuation to the international grain price， but also the domestic grain market. It is reported that the wholly-owned enterprises or joint venture set up by multinational grain dealers are speeding up to intervene in China’s grain purchase. In many grain producing areas， the overseas grain enterprises have already dashed to the forefront.Foreign enterprises have made low-key and meticulous layout via both external and internal penetration. It was from inside that the former empire—Soviet Union collapsed. T is time the strategy of foreign enterprises is termed by industry insiders “a new round of enclosure movement after having controlled the domestic edible oil market”.Multinational grain dealers are equipped with a cutting edge over the domestic counterparts. The defeated Chinese soybean enterprises have conducted a research on the business model of the multinational giants， who are found to make profit through a long， closely-related and complementary industrial chain， from loan， sell of seeds and fertilizers in the upstream， to storage， logistics and processing in the midstream， and to international grain and oil trade in the downstream. T e multinational giants are similar to a united military group easily weeding out the loose domestic rivals.In the era of whole industrial chain， from product competition to brand competition， and then to culture and industrial chain competition， the ever ignored primary industry， agriculture domain has to change its original operation philosophy due to an upgraded business competition pattern.Recently， the state-owned COFCO has come to the fore in the whole industrial chain competition pattern. Started just from an enterprise engaged in grain import and export， COFCO has now developed into a giant grain enterprise with an integrated industrial chain， including wheat， corn， oil， rice， barley， sugar， tomato， feed and meat.Much potential lies in the healthcare market for traditional agriculture. As the multinational grain dealers are nudging into the domestic market through enclosure movement， pure warning cannot help the domestic enterprises and the national food security lacks a solid support.When edible oil price soared in 2008， COFCO should take the responsibility to intervene in the market， but it failed to do so due to a less than 10% share in the edible oil market monopolized by foreign capital.Without a complete industrial chain， discourse power is still absent even if trade value is greater. In the era of whole industrial chain， only the constructor of the industrial chain claims as the winner.T e domestic soybean enterprises lamented: it seems that they just use cold weapons to confront nuclear weapons. Only by forging themselves into modern enterprises with powerful innovation and competitiveness can the domestic enterprises turn the tables in the battle with the aggressive foreign counterparts.T is is a grain war in a large scale. If China’s state-owned enterprises cannot take their responsibility， Chinese grain enterprises may vanish in a couple of years ahead. T en， who is competent to feed Chinese peopleCOFCO has only taken its first step and China needs more similar enterprises. Several dozens of state-owned enterprises serve as seeded players for the whole industrial chain. And some competent and visionary local enterprises or private enterprises can also make themselves stronger by taking the opportunity of market transition.
