China has reduced its wheat minimum support price to $346 per ton. The decision is a step toward bringing domestic prices more inline with the international market.
China, the world’s top wheat producer, has cut its minimum purchase price for the grain for 2018 to help whittle its mammoth stockpiles and adjust to the market, the first time a downward revision was made since the policy began in 2006. After years of bumper harvests, China no longer struggles with food shortages. China’s Ministry of Agriculture (MOA) estimates that the country’s grain output will surpass 600 million tons in 2017. National grain output stood at about 616 million tons last year.
China National Development and Reform Commission (NDRC) declared that the government has cut the 2018 price for the grain to 2,300 yuan ($346) per ton, down 2.5 percent from this year, Reuters reported on 27th October. The new price takes into account “grain production costs, market supply and demand, domestic and foreign market prices and industry development”, NDRC said. The decision is a step toward bringing domestic prices more inline with the international market. As the world’s one of the leading importer and exporter of grain, China influences the world grain market in many ways even with its policy of grain self-sufficiency.
But the cut is not expected to immediately impact the market, with a lower price widely anticipated, Reuters reported.