* Govt cut next year's floor price for wheat by 2.5 pct
* More farmers to plant high-gluten varieties priced at premium
* Move to help boost supply of wheat needed for Western breads
By Dominique Patton
BEIJING, Oct 31 (Reuters) - China's first cut to its wheat floor price in over a decade may encourage some farmers to plant more lucrative varieties, said analysts and farmers, helping the world's top wheat grower better meet the growing appetite for Western-style baked goods.
Beijing said last week its minimum purchase price for wheat in 2018 would be lowered to 2,300 yuan ($347) per tonne, down 2.5 percent from this year's price, in a move aimed at curbing rising stockpiles. wheat prices could push more growers to switch to high-gluten or low-gluten varieties that sell for a significant premium to the common wheat that is used in China in noodles and steamed bread.
The shift would more closely align China's grain output with the market and make it less reliant on government subsidies, currently the target of a trade challenge at the World Trade Organisation. It could also reduce China's needs for imported wheat, typically used to improve gluten levels in domestic supplies.
Chinese consumers are buying more of the Western-type breads and cakes that need high-gluten and low-gluten wheat varieties. The higher demand for those types has required millers to blend imported wheat with local varieties to make flour suitable for baking those items.
"The market determines the price of high gluten wheat. Farmers have no worries about selling it," said Rosa Wang, analyst at Shanghai JC Intelligence Co Ltd.
The government currently buys common wheat from farmers at the minimum price when the market price drops below that level. But the policy has encouraged farmers to maximize their output of wheat rather than meet market demand for certain types.
A price difference of about 200 yuan per tonne encouraged Zhang Zilian, a farmer in Shijiazhuang in Hebei province, to switch to high-quality wheat this year.
"If output is the same as the common wheat, then for large growers like us the difference boosts our income," she said.
Li Guoyong, another grower in Hebei province who has grown high-quality and common wheat for seven years, said he has achieved similar yields for both, making the high-quality wheat a lucrative choice.
"This year for common wheat, the purchasing price is 2,360 yuan per tonne, but for high gluten wheat, it was 2,640 yuan."
Small farmers who sell to middlemen are unlikely to make the switch, however, as they may not be offered market prices, said Li. ($1 = 6.6270 Chinese yuan renminbi)
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