October 18, 2007

China buys less wheat under minimum-purchase price programme
 

Chinese government wheat procurement under the minimum-purchase-price program fell to 28.96 million tonnes this year, the National Grain & Oil Trade Centre said, down 30 percent from a year earlier.

Last year, central government-designated state-owned warehouses in six major wheat growing provinces bought 41.25 million tonnes of domestic wheat.

The average wheat purchase price was RMB 1,442/tonne, up RMB26/tonne from that of 2006, the government-run center said in an article dated Tuesday (October 16, 2007).

Analysts said the government may have less control over market prices because of its reduced buying this year.

The government' willingness to protect farmers' interests, overall inflation pressure and rising agricultural products' prices in particular will help domestic wheat prices rise steadily from now till year-end, said Pan Wei, a wheat analyst at Dalu Futures Co.