Himfr Comments on Trends in China's Grain Prices

Jun 30, 2010, 10:00 ET from Himfr.com

BEIJING, June 30 /PRNewswire-Asia/ -- Himfr.com, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, comments on grain prices.

The strong summer grain harvest will help stabilize the price of wheat as the summer harvest is mainly a wheat harvest. It is expected that grain prices will not rise much in the near future.

In fact, a rise in grain prices was expected during May. At that time, the main wheat producing provinces were expecting a summer harvest decline, which sparked concerns about a possible grain price problem, i.e. soaring beyond reasonable levels.

In synchronization with this concern, grain prices on the market did experience some rising trends in May. The 25 major grain producing provinces, state-owned, and non-state-owned grain enterprises in rice, wheat, and maize maintained an average price of 99.60 yuan per 50kg, which was up 1.94% compared to the previous month, and up 11.44 percent in comparison with the same period of last year.

This year's summer production experienced the possibility of decline due to southwest China's severe drought and the northern wheat region's continuous low temperatures and other weather disasters during winter. A good harvest was not easy to produce. According to a report from China's Ministry of Agriculture, the total summer grain production this year will be over 246 billion jin, which is close to the previous year's level. Among them, the winter wheat output is more than 217 billion jin, which is a slight increase over the previous year.

Relative to the 11 major producing provinces increasing output, provinces in the southwest area, such as Yunnan, Guizhou, and Guangxi, appeared to register reductions in output by more than 1/3. Southwest summer grain accounted for less on the country's total summer grain quota, and although there has appeared some rises in regional grain pricing this will not have much of a relationship to grain production and prices nation-wide.

It is understood that China's summer grain yield accounts for 1/4 of the annual grain output, and achieving the steady development of grain production over the year depends on early rice in autumn. At present, early rice's main producing areas have suffered severe floods, but, although the storm will have some negative impact, it is difficult to make definitive conclusions for grain production and trends in grain pricing.

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