December 19, 2003

Falling Wheat Prices in Henan Could Postpone Auction

Falling domestic wheat prices in Henan could force the provincial government to postponed a planned wheat auction.

There has been talk that Henan could sell 750,000 metric tons of wheat from state reserves in an auction this week.

But it is highly likely that the auction will be postponed to early January, traders said.

The sudden rally in domestic wheat prices from late November, ignited by tighter supply after local governments took measures to curb overloading by truckers, had prompted the government to release more grains from state reserves.

Last week, Henan province in central China sold nearly 200,000 tons of old wheat from the state reserve to select feedstuff producers.

Following that auction, domestic wheat prices have turned soft, traders said.