March 17, 2004

China's Henan Province Sells 930,000 Tons Wheat

China's top wheat growing province of Henan sold 930,000 tons of wheat reserves for milling in a public tender beginning on Tuesday, local market officials said on Wednesday.

The wheat from local harvests in the late 1990s was sold at between RMB1,480 ($180) and RMB1,710 a ton to more than 200 bidders, said an official in charge of the tender.

"Most of the wheat was sold at RMB1,570 per ton, only a few bought at the highest price," he said, adding some 70,000 tons of wheat were left unsold.

The China Grain Reserves Group (Sinograin) sold 200,000 tons of wheat imported from Canada in 1999 on Monday at prices of between RMB2,000 and RMB2,100 a ton.

Traders said prices stayed strong due to tight supplies amid shrinking stocks and expectations of a poor harvest.

"Some granaries here did not hold as much stock as were logged and supplies are quite tight," said a trader in Zhengzhou, capital of Henan province, adding that he thought prices would rise further.

(US$1 = 8.277 Yuan)