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Wheat Procurement Policy Unveiled

China Agriculture Report By CnAgri2013-05-31 10:50:46China Agriculture Report Print The government issued its protective wheat procurement policy on May 23. The procurement will be carried out by China Grain Reserves Corp and provincial grain reserves companies in major wheat-producing and wheat-consuming provinces. Grain procurement fee is RMB50/MT. Grain storage fee is RMB86/MT/year in northern provinces and RMB94/MT/year in the Yangtze River reaches and RMB110/MT/year in southern coastal provinces.
Wheat market price is generally far above the protective procurement price, except in Henan and Hubei. As wheat supply is basically balanced and the state-run companies’ massive procurement may lead to a tight market supply, large flourmills are expected to offer a higher price than the protective price in order to build up a wheat stock.
Wheat production is predicted to be 121 million MT this year, 60.06 million MT of which may be turned into commodity wheat, judging by the trend of commodity wheat ratio in the last five years. More than 95% of the commodity wheat are usually contributed by Henan, Anhui, Shandong, Jiangsu, Hebei, Xinjiang, Hubei and Shaanxi.

From “China Grains Market Weekly Report

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