A two-day auction for 2.5 million tons of state wheat reserves opened yesterday at the Henan Provincial Grain Trade Market, which is conducting the largest ever such auction in China.
Auction volumes have risen sharply this year, compared with just a few months ago. In late 2007, auctions were no more than a few hundred thousand tons, but two auctions in January offered 2 million tons each time. The auctions are meant to stabilize market prices and prevent private enterprises from holding grain stocks in the hope of profit.
"The auction was entrusted to us by the China Grain Reserve Corporation. It is the largest sale of wheat reserves since China imposed a minimum grain purchase price in 2006," said Huang Shang, deputy manager of the market.