BEIJING, June 21 (Reuters) - Top wheat producer China has nearly completed this year's harvest, state media reported on Wednesday, but most demand for the grain so far is coming from animal feed makers.
China was expected to produce 137 million metric tons of winter wheat this year, and state media have reported a 'bumper crop'.
But heavy rain and wind hit large swathes of the crop in central Henan province in early May just before the harvest began, triggering widespread early germination in the grain and other quality issues.
About 20 million metric tons, or 15% of the total, is unfit for human consumption and can only be used by animal feed makers or alcohol producers, said Ma Wenfeng, a senior analyst with Beijing Orient Agribusiness Consultancy.
Beijing has urged local reserves to buy up some of the damaged grain but purchases have been slow so far, reported state-backed media China Grain.
A lot of wheat has high levels of toxins, and traders and farmers are also keen to wait for better prices, said the report.
Animal feed makers, however, are snapping up the sprouted wheat, said Yuan Song, chief analyst at Juxing Agriculture Group.
"It's very cost-effective for them," he said.
Sprouted wheat is selling for between 2,300 yuan and 2,400 yuan ($320-$334) per ton in northern China, compared to about 2,820 yuan per ton for quality wheat in Zhengzhou, the capital of Henan province.
The discounted wheat is also much cheaper than corn, which is selling for about 2,700 yuan per ton in Dalian city in northern China, he said.
The seeding process after harvesting was a bit delayed in southern China, but normal in northern China, Ma told Reuters. ($1 = 7.1881 Chinese yuan renminbi) (Reporting by Ningwei Qin and Dominique Patton; Editing by Kim Coghill)
