September 11, 2007

China wheat prices stable; steady demand ahead of the holidays

Wheat prices in China's major producing regions were mostly stable in the week to Monday (September 10), supported by steady demand ahead of holidays later this month.

Purchase prices of average quality white wheat in Xinyi market in Jiangsu province were at RMB1,470 to RMB1,520 a tonne, flat from a week earlier.

Wheat purchase prices in the northern part of Anhui province were also stable at RMB1,480 to RMB1,520/tonne.

The new wheat purchase prices in Shandong province were at RMB1,520 to RMB1,580/tonne, unchanged from a week ago.

Steady buying by processing plants due to a pickup in demand ahead of the coming Mid-Autumn Festival and National Day Holiday helped support overall wheat prices, said grain information provider alibaba.com.

Ample supply and the government's minimum purchase price programme will help keep wheat prices at stable levels, analysts said.

As of Aug. 31, state houses have bought 27.89 million tonnes of new wheat in six major producing provinces, said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.

The amount, along with the 23 million tonnes of wheat bought by the government in 2006 that haven't been sold, will guarantee ample supply, she added.

Last Thursday, China sold 553,600 tonnes of wheat it had bought under last year's minimum purchase price programme, 39 percent of the 1.42 million tonnes it planned to sell.