China's largest wheat growing province of Henan will sell 500,000 tonnes of wheat from reserves to boost supplies and help ease rising domestic prices, industrial officials said on Thursday.
China Grain Reserves Corp (Sinograin) in Henan would sell the wheat for milling on November 25 after domestic flour prices rose 10 percent this month because of tight wheat supplies.
"Flour mills have used up all their stocks and are eager to buy the grain," said one market official in Zhengzhou wholesale market, where the auction will be held.
The government reserve authority had failed to release wheat stocks to the market, leading to tightness at home market and pushing prices sharply up over the past two weeks. Physical wheat prices rose 7.0 percent this month to 1,580 yuan ($201.1) per tonne in major growing areas.
Industry analysts expected China would not sign any new deals to export in coming months. China had exported heavily since late last year in order to support domestic prices after a bumper harvest. "The price rise gives no profit for exports and there is slim possibility for any new deals," said one analyst.
China exported 206 percent more wheat in the first nine months of this year at 583,864 tonnes. China last month had signed exports totalling 600,000 tonnes, they said.
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