In 2012, the minimum purchase price of wheat rose by up to 9 yuan per 100 jin
On May 23, the National Development and Reform Commission and five other departments jointly issued the "2012 Wheat Minimum Purchase Price Implementation Plan," setting the minimum purchase price at 1.02 yuan per market jin, with national standard third-grade wheat produced in 2012 as the standard grade. The price difference between adjacent grades shall be set at 0.02 yuan per market jin.
The purchase price of 102 yuan per 100 jin for white wheat, red wheat and mixed wheat set in this "Plan" represents an increase of 7 yuan, 9 yuan and 9 yuan respectively compared with 2011. "This further increase in the minimum purchase price of wheat is notably larger in margin, which also reflects the state's consideration of continuing to support a steady rise in wheat prices," Zhang Zhixian, information director of the China Grain Network, said in an interview with the National Business Daily.
It is reported that the main wheat-producing areas implementing the "Plan" are the six provinces of Hebei, Jiangsu, Anhui, Shandong, Henan and Hubei. Whether other wheat-producing areas implement the minimum purchase price policy shall be decided independently by the provincial-level people's governments. The implementation period of the above minimum purchase price is from May 21 to September 30, 2012.
In 2011, because market prices in Henan and other places exceeded the wheat minimum purchase price of 0.95 yuan per market jin, the China Grain Reserves Corporation system lost the necessary conditions for launching the market-supporting purchase, resulting in no market-supporting purchase being launched that year. Sun Guangmei, a senior analyst at Sublime China Information, introduced: "The state stipulates that if the market price stays below the minimum protective price for 3 consecutive days, the market-supporting purchase will be launched. The minimum protective price set by the state generally takes into account changes in farmers' planting costs and ensures farmers' enthusiasm for planting. The state generally sets the next year's latest protective price in early October each year; if the market changes significantly the following year, the state will adjust the minimum protective price accordingly."
Whether the market-supporting purchase can be launched this year remains unknown. Zhang Zhixian believes: "It will be very difficult to launch the market-supporting purchase in most areas this year; even if it is launched, it will only be partial. The main influencing factor is price. The current price of old wheat is higher than the market-supporting price." Manager Lin of Puyang, Henan, also revealed: "It is estimated that this year's market price can easily reach above this minimum purchase price."
According to market price monitoring, the average purchase price of white wheat in the Xinyi market of Jiangsu rose from 1.09 yuan/jin to 1.10 yuan/jin. The purchase price of individual grain brokers rose from 1.06 yuan/jin to 1.08 yuan/jin.
Manager Lin told the reporter that the current price of white wheat in the Puyang area is about 1.09 yuan per market jin; if labour costs are not counted, the income per mu can reach about 1,000 yuan. And the local wheat can basically reach the standards of grade one and grade two.
According to Sun Guangmei's analysis, the current cost of wheat (excluding manual management) is basically 450 yuan to 500 yuan per mu, while the yield per mu in various places is roughly 600 to 900 jin. Calculated at 1.02 yuan per jin of wheat, the income is 612 to 918 yuan, higher than the cost.
The "Plan" emphasizes that during the implementation period of the minimum purchase price, taking the county as a unit, when the local wheat market price stays below the wheat minimum purchase price announced by the state for 3 consecutive days, the branch of the China Grain Reserves Corporation, together with the provincial departments of price, grain, agriculture, and the Agricultural Development Bank and other relevant departments, shall verify and confirm it, then report to the China Grain Reserves Corporation headquarters for approval to launch the plan within the relevant city and county or the whole province, and report it to the relevant state departments for the record.
On May 24, Ren Zhengxiao, Party secretary and director of the National Grain Bureau, pointed out regarding this year's summer grain purchase work that efforts should be started early to urge enterprises to carry out purchase work, strengthen organisation and coordination, guide various enterprises to actively carry out self-operated purchases, and invigorate grain circulation. At the same time, grain departments at all levels will go to the front line to help enterprises solve problems existing in purchases.