Sinograin buys 30 mln tons of grain to stabilize prices

A grain glut has forced the Chinese government to buy up some 30 million tonnes of wheat and early rice since late May this year, despite climbing inventories, according to the China Grain Reserve Corp (Sinograin) on Thursday.

The government intervention, conducted by Sinograin under a minimum grain purchase price arrangement, aims to stabilize market prices and protect farmers' interests during good years, Sinograin said in a statement.

To support the market, Sinograin has bought a total of 25.35 million tonnes of wheat, three times the amount last year, from the provinces of Jiangsu, Anhui, Shandong, Henan and Hubei since May 27 to fill national reserves.

Meanwhile, the company has also shored up 4.19 million tonnes of early rice in five southern provinces since July 22 under the summer grain purchase arrangement.

The company completed all purchases of summer grain under the minimum price arrangement in September, Sinograin said.

To make room for the new grain, Sinograin had to accelerate its sales of old grain stored at all national granaries.

Earlier this year, China's cabinet said it will step up efforts to purchase and store grain and build more granaries as its grain output rises.

The country hit a record high in summer grain output with 136.60 million tonnes this year, following total grain output of 601.94 million tonnes last year in a 10-year bumper harvest streak, according to the National Bureau of Statistics.