China has been conducting frequent auctions to get rid of old grains to make room for the new domestic crop and imports.

In the Beijing tender, bids for high-quality winter wheat from the new crop this year started at about 1,220 yuan (US$147.40) a ton, while medium grade strains from the 2001 season were quoted at 1,140 yuan (US$137.35) per ton, the official said.

The wheat came mainly from Henan and Shandong provinces, China's principal wheat-growing regions, he said.

The government has been encouraging grain consumption areas like Beijing and southern provinces to buy from major growing areas in the north by lowering domestic railway transport fees to compete with imported grains.

China is allowing millions of tons of grain imports at low tariffs as part of its commitments to the World Trade Organization.

(Business Weekly July 30, 2002)