February 2, 2007

China sells 391,830 tonnes wheat, 55 percent of planned volume

China sold 391,830 tonnes of wheat in six provinces Thursday (Feb 1), or 55 percent of the 711,000 tonnes it had planned to sell.

Prices ranged from RMB1,400-1,630/tonne, compared with RMB1,400 to RMB1,610/tonne in the previous sale.

The sale is among the latest in a series of auctions aimed at stabilising wheat prices. China sold 412,100 tonnes of wheat last week, or 51 percent of the planned volume.

The wheat was bought by state warehouses last year under the minimum purchase prices.

China's central government designated state-owned warehouses in six major wheat growing provinces to buy wheat at minimum purchase prices of RMB1,380-RMB1,440/tonne from June to September last year, hoping to protect farmers' incomes.

China Grain Reserves Corp purchased 40.69 billion kilogrammes of wheat at the government's minimum purchase prices in 2006.

Grain trading centres in the provinces started selling the wheat in November to cap high cash prices due to tight supply.