China raises state purchasing price for wheat

BEIJING - China will lift the government purchasing price for wheat in 2013 by about 10 percent from this year, the country's top economic planner said Saturday.

The move is intended to stimulate grain production, the National Development and Reform Commission (NDRC) said in a statement.

The minimum purchase price for wheat in the country's major wheat-producing areas will be increased to 112 yuan ($17.67) per 50 kg, up 10 yuan from the 2012 price, the NDRC said.

Most of China's 1.3 billion people are fed by domestically produced grain, making wheat a major crop in the country.

The move will ?help stabilize the domestic market amid a volatile global market, analysts said, adding that stabilizing food supplies will be crucial in checking inflation, as food prices account for about one-third of the prices used to calculate it.

China has set minimum purchasing prices for grain, including wheat and rice, since 2004. Under the scheme, the government buys grain from farmers at the state-set price when the market price drops below it.