(CBN - Global) April 26 -- Excessive grain inventories are giving China's farmers and local food departments a headache. If effective measures cannot be implemented in time, there will be no storage space available to store unsold grain from the summer wheat harvest, several insiders have said.
"All granaries in the surrounding areas are basically full. Harvesting for wheat is going to start soon, and if the harvested wheat does not sell then we will have a problem," said the owner of a large grain farm.
The grain storage capacity in Anhui, Hubei, Henan and other major grain producing provinces has not improved from the tense granary situation last year, according to an Economic Information Daily reporter who travelled there. They still have too much inventory and limited storage space.
The slow release of stocks from the granaries has exacerbated the capacity shortage. There are still 12,000 tons remaining from the 2013 harvests. These stocks are fast approaching their expiry date yet the stock cannot be shifted as auction prices, set by the government, are higher than market prices, said a person in charge of a granary.
Policy dictates that granaries supporting the national food stocks must sell their grain at prices set by local authorities. Such prices are higher than market prices making it a long and arduous process to shift the grain, a spokesperson from the Grain Administration of Hubei Province said.