China put another million tons of its wheat reserves up for auction last Friday in a further bid to halt the escalation of prices on the domestic market but this time only 660,000 tons were sold, according to reports from the Zhengzhou grain market.

Previous auctions - in east China's Shandong Province and in Zhengzhou, the capital of central China's Henan Province - saw a higher level of sales.

Nevertheless, the government has achieved its purposes because the prices of wheat and flour have declined markedly since the grain auctions began.

The price of wheat has declined from a record high of 1,940 yuan (242.5 U.S. dollars) per ton last November to 1,620-1,660 yuan currently, and the price of flour has declined by 200 yuan per ton from its peak.

"A softer level of sales shows that the previous auctions have had an effect, and grain shortages have been eased nationwide," said an expert.

"The upcoming Spring Festival will boost demand for wheat and flour in the domestic market, which will impact the price of food, " said the expert, "but the price of flour will not increase too much because of government control."

China has auctioned 5 million tons of its grain reserves since last November in a bid to keep down rising prices on the domestic market.

Source: Xinhua