December 8, 2006

 

China issues rules on auctions of state reserve grains

 

 

China has published rules on auctions of grains from interim state reserves, the National Development and Reform Commission said Thursday (Dec 7).

 

In a statement on its website, China's top economic planning agency said auctions of grains from interim state reserves will be held on a regular basis to ensure stable supply in the market and prevent large fluctuations in grain prices.

 

Interim state reserves refer to grains bought under the government's minimum purchase price programme and grains imported by the state, the NDRC said.

 

Under a plan 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 a tonne from June to September.

 

Wheat purchases by state-owned warehouses during this period were over 43 million tonnes.

 

Under a similar programme, China set a minimum purchase price of RMB1,400/tonne for early long grain rice harvested in four major rice producing provinces and ended up buying 3.75 million tonnes from Jul 16 through Sep 30.

 

Floor prices for those auctions should be the minimum purchase price, plus a premium, including various costs incurred, the NDRC added.

 

The NDRC did not state how to determine the floor prices for auctions of imported grains.

 

China sold over 2.6 million tonnes of wheat from state reserves at auctions held since late November.

 

The NDRC said it will coordinate auctions of grains from interim state reserves.