July 29, 2011

 

New-wheat buying gains pace in China
 

 

Grain companies in China bought a combined 28.6 million tonnes of new-crop wheat from farmers in major producing areas as of July 20, double the 13.1 million tonnes bought by end-June, the State Administration of Grain said Wednesday (Jul 27).

 

However, the amount was far short of the 39.5 million tonnes purchased by last July 20, it said.

 

Market prices are much higher than the level of RMB1,860-RMB1,900 (US$289-295)/tonne at which the government will intervene with a minimum-price programme, which has slowed buying, but the pace is accelerating amid talk that the government may raise the minimum so that China Grain Reserves Corp, the state stockpiler, can replenish state inventories.

 

Chinese companies bought 51.9 million tonnes of wheat as of September 30 last year, including 22.4 million tonnes of wheat under the minimum-price programme.

 

In June, state-owned grain companies bought white wheat and red wheat at average prices of RMB2,054 (US$319)/tonne and RMB2,075 (US$322)/tonne, up 4% and 10%, respectively from a year earlier, according to data from the National Development and Reform Commission.

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