The State Grain Administration held more auctions of wheat totaling 800,000 tons to ease market demand on Dec 7. It follows three auctions held last month to ease the shortage of wheat and stabilize market prices. However, it is said the auctions would not help ease the surging prices of wheat in the long run.

Held in Hefei, Zhengzhou and Shijiazhuang, the auctions set the minimum bid price at 1,440 yuan (US$180) per ton of red wheat and 1,500 yuan (US$187) per ton of white wheat. The price of wheat so far this month has come down to about 1,600 yuan (US$200) per ton after a total of 250,000 tons was sold to bidders in Hefei and Zhengzhou during the last three auctions.

It is predicted wheat prices would continue rising in the long run due to strong demand in the domestic and foreign markets. The minimum purchase price after three consecutive years of bumper harvests had kept wheat prices at a higher level and tightened market supply.

Chinese central government has centralized grain purchases for six main grain production bases and bought more than 41 million tons of wheat for State-run reserves, accounting for almost 40 per cent of the country's estimated 103 million tons annual wheat income, according to statistics from China Grain and Oil Information Centre. The world's wheat reserve has hit its lowest in 26 years with only 11.8 million tons in storage. China's wheat exports to foreign countries are therefore expected to grow substantially.

Source:佚名