June 11, 2007

 

China wheat prices stable; Farmers reluctant to sell
 

 

Wheat prices in China were largely stable in the week to Monday (Jun 11), with farmers reluctant to sell while they were busy harvesting wheat and planting corn. 

 

Prices of average-quality wheat in Henan province were stable from a week ago at RMB1,500-1,520/tonne.

 

In Shandong, another major wheat-producing region, prices were at RMB1,520-1,560/tonne, compared with RMB1,530-1,560/tonne in the previous week.

 

"Flour processing plants purchased wheat actively, but farmers did not sell in large amounts," the China National Grain and Oils Information Centre said in its report.

 

The wheat harvest in China was progressing smoothly, with China's largest wheat-producing region, Henan province, having harvested 4.73 million hectares of wheat as of Saturday (Jun 9), or 94 percent of the wheat it planted.

 

Wheat output in Henan province accounts for about 27 percent of China's total wheat production.

 

Many flour processing plants in Jiangsu, Anhui and Henan provinces have started buying the newly-harvested wheat, with prices mostly stable or slightly lower than the minimum purchase prices set by the government, said traders.

 

This year, the minimum purchase price for white wheat is RMB1,440/tonne, and for red and mixed wheat RMB1,380/tonne.

 

Newly harvested wheat needs 90 days for its quality to reach the standard for processing.

 

China sold just 88,600 tonnes of wheat during its weekly auction last Thursday, or about 14 percent of the 647,000 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.

 

RMB1=US$0.1304 (Jun 11)