China’s state-run food trader slammed the U.S. government’s dramatic revisions of its supply-demand data on corn as an “insult,” saying the sharp changes made it difficult for the entity to hedge risks.
The unusually candid and critical remarks by a senior COFCO official triggered a quick retort from U.S. analysts and traders, who noted the irony of such complaints from a country that treats much of its grains data as a state secret.
But the exchanges underscored a mounting sense of frustration over the inconsistency of data that has contributed to exceptional volatility in the market, and which has spurred G20 leaders to push for a global data repository that would help quash speculation that has driven prices to record highs.
“I would like to question the U.S. Department of Agriculture, in just 10 days or less than a quarter of a year, why does your corn data differ so much?” Fei Zhonghai, COFCO’s chief risk control manager, told a global derivatives forum in Dalian July 6.
“One time it was as high as heaven while another time it was as low as hell,” he added.
“USDA data for researchers like us is an insult,” Fei said. “If this is the manner of data release, companies like us are unable to hedge on the futures market, it may bring huge losses to our enterprises.”
U.S. analysts and traders had harsh words for Fei and China.
“Seems ironic coming from a key official in a country that regards corn stocks as a state secret,” said R.J. O’Brien analyst Rich Feltes.
“I suggest he direct his anger toward (the) Beijing leadership who will not share corn stocks data whatsoever rather than demeaning dedicated NASS staff who are doing the best they can with resources available,” Feltes said.
Last week’s USDA data was from the National Agricultural Statistics Service (NASS).
The U.S. Department of Agriculture defended its data, saying it was not “in the business of trying to manipulate numbers in any way.”
“I can understand COFCO or anyone else being upset there are big changes in the forecast. We have to deal with those here as well. But we’re reporting the numbers from whatever our statistical agency has shown, and they’re what we feel are the best estimates at that point in time,” USDA chief economist Joe Glauber told Reuters.