April 17, 2007

China's wheat prices down as farmers cash in for planting season

China's wheat prices were lower in the week to Monday (Apr 16) as farmers were eager to cash in to prepare for the planting season in April.

Prices of average-quality wheat in Henan province were at RMB1,480-1,520 a   tonne, compared with RMB1,540/tonne a week earlier.

In Shandong, another major wheat producing region, prices were at RMB1,540-1,640/tonne, down from RMB1,560-1,640/tonne a week ago.

"Farmers sold a lot of their stocks to raise money for the new planting season," said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.

Traders said wheat prices are unlikely to rise significantly ahead of the sales of newly harvested wheat in June, as farmers will continue to sell their stocks to make room for new ones.

Last Thursday, China sold 482,000 tonnes of wheat during its weekly auction, or around 48 percent of the 1.004 million tonnes it planned to sell.

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.

Analysts expect the country to announce detailed plans of its minimum purchase price programme for this year in May or June.