China wheat prices stable as harvest, minimum price plans begin

Wheat prices in China's major producing regions were largely stable in the week to Monday as harvesting gathered momentum and the government kicked off its minimum price purchase programme.

 

Wheat prices in Laizhou in Shandong, a major producing province, were at RMB1,880 to RMB1,890 a tonne, mostly unchanged from a week ago.

 

In Hengshui, in Hebei province, prices were also RMB1,880-1,890/tonne, largely the same as a week ago.

 

"At most, prices were fluctuating about RMB10/tonne," said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.

 

With new wheat in the market of slightly lower quality than old stock, prices in Buyang in Anhui province were slightly down at RMB1,700/tonne versus RMB1,760/tonne a week ago.

 

Drought-related problems may affect this year's supply but government measures to quell its effects are expected to have limited severe crop damage.

 

"We were (initially) expecting a windfall harvest but now it may be equal to or slightly less than last year's harvest," Hai said.

 

China harvested 112.5 million tonnes of wheat in 2008.

 

About 16 percent of the winter wheat crop had been harvested as of Sunday, the Ministry of Agriculture said in a statement on its Web site late Sunday.

 

In the meantime, the government has begun its 2009 wheat purchase program, supporting prices by offering a minimum of RMB1,740/tonne.

 

Wheat prices were largely stable at government auctions in the week to Monday.

 

The average auction price in Henan province was RMB1,805/tonne, just RMB1 lower than a week ago.

 

In Anhui province, the average auction price was RMB1,823/tonne, versus RMB1,820/ton a week ago, Yang said.