December 1, 2006

 

China sells 932,300 tonnes of wheat in auctions

 

 

China auctioned 932,300 tonnes of wheat, auctioneers said Thursday (Nov 30).

 

In a statement on its website, Zhengzhou Grain Wholesale Market, one of the auctioneers appointed by China's grain authorities, said it auctioned 328,900 tonnes of summer-harvested wheat at an average price of RMB1,501 a tonne, with bids ranging between RMB1,400 and RMB1,600/tonne Thursday.

 

It also sold 22,600 tonnes of imported wheat at a floor price of RMB1,900/tonne at the same auction.

 

Zhengzhou Grain Wholesale Market had planned to sell 401,400 tonnes of newly harvested wheat and 111,300 tonnes of imported wheat Thursday.

 

Zhengzhou is the capital of Henan province.

 

Anhui and Hebei provinces sold a total of 580,800 tonnes in a combined auction Thursday, with bids ranging from RMB1,400 to RMB1,650/tonne, said Anhui Grain Wholesale Market, another government-approved auctioneer.

 

The two provinces had originally planned to auction a combined 720,000 tonnes of wheat Thursday.

 

The auctioneers didn't provide a reason for the lower volume sold.

 

The three major wheat producing provinces of Henan, Anhui and Hebei are in northern and central China.

 

To protect farmers' incomes, China's central government designated state-owned warehouses in six major wheat growing provinces to buy wheat at minimum purchase prices of RMB1,380-1,440/tonne from June to September, so that wheat prices won't slump after a good harvest this year.

 

Wheat purchases by state-owned warehouses during this period accounted for nearly half of China's winter wheat production in 2006, which effectively makes the government a monopoly supplier in the market.

 

The government releases its stocks to the market through auctions, with the first one held Nov 3.

 

Last week, average quality wheat in major producing regions was quoted around RMB1,480-1,600/tonne.