March 31, 2009

China's wheat prices in major producing areas were mostly stable in the week to Monday (March 30), as traders stayed away after having bought enough earlier.

Prices in Hengshui in Hebei province were around RMB1,920 a tonne, unchanged from a week earlier, while in Ji'nan, in Shandong province, they were between RMB1,860-RMB1,870/tonne, also stable from the previous week.

Last week, the government sold 1 million tonnes of wheat it bought under the minimum purchase prices programme, or 44 percent of the 2.28 million tonnes it planned to sell, compared with 1.28 million tonnes done in the previous week.

Although the country's crop has mostly recovered from an earlier drought, wheat stripe rust may still damage the outlook for this year, the Ministry of Agriculture said late Friday.

Wheat stripe rust, a fungus that affects yield, hit crop spread over 1.39 million hectares as of last Wednesday, the ministry said.

This is 52 percent more than the area affected by the fungus at the same time last year, while China's wheat acreage this year is estimated at 24 million hectares, up 0.5 percent on year, according to data from the China National Grain and Oils Information Centre.

China will harvest its new wheat in June.

Processing plants expect wheat prices to remain mostly stable in the near term as supply increases and demand in April is typically lower than that in March.