Agricultural Development Bank of China (ADBC) will loan 53
billion yuan (US$6.93 billion) to six provinces to ensure the
minimum purchasing price for wheat, the bank said in Beijing
Sunday.
The minimum purchasing price for main crops, started in 2006, is
designed to provide a reasonable price level for protection of
farmers' interests.
The loans cover six provinces of Hebei, Jiangsu, Anhui,
Shandong, Henan and Hubei, which are China's major wheat-producing
regions. When the market price is lower than the minimum price,
entrusted enterprises will purchase wheat at the minimum price, the
ADBC said.
The lowest price for white wheat is fixed at 72 yuan per 50
kilograms, and 69 yuan for red wheat, the country's top economic
planner National Development and Reform Commission said
earlier.
China's wheat production will nudge up a little this year as its
planting area has increased slightly, according to the bank.
However, China National Grain and Oils Information Center
predicted in its monthly update in May that the country's wheat
output will go down by 2.53 percent year on year to 101.8 million
tons even if the weather turns favorable in the drought-hit
areas.
Given the government's massive grain reserve, analysts said the
drop will not result in a grain shortfall or drastic price
hikes.
Summer crops normally make up 20 percent of China's annual grain
output which has grown for three straight years since 2003 to
497.46 million tons last year, up 2.8 percent or 13.44 million tons
from 2005.
(Xinhua News Agency June 4, 2007)