June 27, 2006

China wheat prices stable around government-set minimum prices

China's wheat prices remained steady last week at government-set minimum purchase prices, traders said.

In Henan, Hebei and Shandong provinces, the country's major wheat producing regions, prices for white wheat were around RMB1,440 a tonne, and for red wheat around RMB1,380/tonne.

Government-designated warehouses have been buying wheat at preset prices since Jun 1, as the government hopes to protect farmers' incomes in an oversupplied market. The policy will be enforced until Sep 31.

"It's possible that prices may go above the levels in some places, but generally speaking, prices will remain stable at the level," said Chen Kang, an analyst with National Grain and Oils Information Centre.

Meanwhile, "farmers have been actively selling, given the favourable prices," Chen said.

The general oversupply conditions in China have resulted in a drop in imports.

Wheat imports in May fell 75.2 percent on year to 59,160 tonnes, while imports in January-to-May slipped 89 percent to 268,795 tonnes, customs data showed Monday (Jun 26).