June 19, 2006

China wheat prices stable on govt-set levels

China's wheat prices were mostly stable last week around the government-set minimum purchase prices, and are unlikely to change much before the end of September, when the policy enforcement ends, analysts said.

While government designated warehouses strictly implement the pre-set prices at RMB1,440 a tonne for white wheat, and RMB1,380/tonne for red wheat, prices offered by other buyers were also near these levels, said Li Ke, an analyst with National Grain & Oils Information Centre.

The majority of the buyers were still government-designated warehouses, Li said.

Prices by non-designated buyers in Hebei province are quoted around RMB1,440/tonne, slightly higher than that in Henan province at RMB1,340-RMB1,360/tonne.

"Prices will probably just maintain near the government-set levels and are unlikely to change much before end-September," Li said.

China's government decided to implement the policy in six major wheat-producing provinces from Jun 1 to Sep 30, in order to protect farmers' income in an oversupplied market.