July 7, 2009
China wheat prices up as farmers reluctant to sell
Prices of new wheat in China's major producing areas were mostly higher in the week to Monday (July 6) as farmers were reluctant to sell in expectation of higher prices.
New wheat prices in Henan province were between RMB1,740 to RMB1,980 a tonne, up RMB20 to RMB40 from the week ago.
New wheat prices in Shandong province were between RMB1,700 to RMB1,880/tonne, up RMB10 to RMB20.
Higher wheat flour prices also helped support wheat prices in some areas.
Rain amid the wheat harvest season has led to poorer wheat quality than last year, and buyers are competing for better quality wheat, said analysts.
The government sold 316,900 tonnes of wheat last week, or around 21 percent of the 1.49 million tonnes it planned to sell. The average price was RMB1,805/tonne, up RMB1 from a week earlier.
But analysts don't expect wheat prices to rise much further due to ample domestic supply.
China's summer grain output is expected to exceed 122.5 million tonnes this year, rising for a sixth year in a row, Ren Zhengxiao, deputy chief of the State Administration of Grain, said last week.
The majority of China's summer grain is wheat.
Meanwhile, state wheat reserves remain sufficient, as around half of 2008's wheat bought under the minimum purchase prices programme hasn't been sold yet.
