April 10, 2007

China's wheat prices little changed; near-term price stability seen

China's wheat prices were steady in the week to Monday, and analysts said they expect no big change before new supply arrives in the market at the end of May.

Prices of average-quality wheat in Henan province were little changed from a week ago around RMB1,540 a tonne.

In Shandong, another major wheat producing region, prices were steady compared with the previous week at RMB1,560-1,640/tonne.

"The weekly government auction ensures market supply, and it also helped stabilize the expectation of prices," said an analyst with the China National Grain & Oils Information Centre.

"It will probably remain stable until the end of May, when new harvest comes to the market," the analyst added.

Last Thursday, China sold a total of 627,100 tonnes of wheat in its weekly auction, 6.3 percent less than the previous week.

China began holding regular auctions at the end of last year to sell wheat bought under the minimum purchase price programme in 2006 to ensure stable domestic supply.

Meanwhile, market participants said demand from flour mills was also little changed, keeping physical trade lacklustre.