May 5, 2009
China wheat prices stable; weak demand offsets price hopes
Wheat prices in China's major producing areas were stable in the week to Monday (May 4), as expectations of higher prices continued to fade in the light of weak demand.
Wheat prices in Anyang in Henan province were around RMB1,890 a tonne, steady from a week earlier.
Wheat prices in Weifang in Shandong province were around RMB1,900/tonne, also unchanged from last week.
Flour processing plants purchased large volumes of wheat earlier, and the current crop is growing well, so sellers' expectations of higher prices have been fading.
The plants haven't been buying wheat actively, as shown in the government's weekly auction results.
Last week, the government sold 207,400 tonnes of the wheat it bought under the minimum purchase prices program last year, or 11.5 percent of the total 1.8 million tonnes it planned to sell. The amount was 25,400 tonnes less than the volume it sold a week earlier.
The average auction price was RMB1,788/tonne, down RMB8/tonne from the week before.
Wheat prices are likely to remain stable ahead of the June harvest due to ample supply and a weak flour consumption season, while farmers are likely to increase sales volumes somewhat before the harvest due to good crop growth, according to analysis in an article published by the Chinese Grain Network.
