April 24, 2007

China's wheat prices stable; balanced supply and demand 

China's wheat prices were largely stable in the week to Monday (Apr 23) as supply and demand were balanced.

Prices of average-quality wheat in Henan province were at RMB1,480-1,520 a metric tonne, little changed from a week earlier.

In Shandong, another major wheat producing region, prices were at RMB1,540-1,600/tonne, slightly down from RMB1,540-1,640/tonne a week ago.

"Supply is sufficient and the wheat output is likely to be reduced this year, keeping the supply slightly tight," said Haiyang, an analyst at Zhengzhou Esunny Information & Technology Co.

But as the government continues its minimum purchase price program this year, holding weekly auctions to stabilize prices, wheat prices are unlikely fluctuate, said traders.

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

Last Thursday, the country sold 415,000 tonnes of wheat during its weekly auction, or around 41 percent of the 1.006 million tonnes it planned to sell.