China's grain-growing provinces cut amount bought at fixed price
June 01, 1999
by Teresa Acklin
LONDON According to the International Grains Council, the major grain-producing provinces in China have reduced the amount of grain they will buy from the 1999 crop under fixed price agreements.
In Heliangjong and Jiangsu, both major grain producers, the provincial governments have slashed the fixed price quotas from 4.78 million to 3.1 million tonnes and from 4.19 million to 2.05 million, respectively. Details were not available for other provinces in China.
Grain procured from farmers under the fixed quota system receives the highest prices paid by the government. The I.G.C. noted that the quota reduction in effect puts a limit on provincial spending.
“While no reason was given for these changes, the explanation is likely to be that a succession of large crops has resulted in the accumulation of excessive stocks,” the council said.
The Chinese provinces also were obligated to purchase supplies delivered in excess of quotas, but at slightly lower “protected prices.”