October 13, 2009
China wheat prices mostly stable; rising demand supports
China's wheat prices in major producing areas have been mostly stable since markets reopened Friday (October 9) after a week-long National Day holiday, supported by rising demand.
Wheat prices in Zhengzhou in Henan province were around RMB1,950 (US$285.70) a tonne, unchanged from the pre-holiday level.
Prices in Xuzhou in Jiangsu province were RMB1,930/ton, compared with RMB1,910-RMB1,930/ton.
Higher demand due to the holiday and the mid-autumn festival even pushed prices slightly higher in some areas.
Dwindling supply was another reason supporting prices, said analysts.
As of September 25, the government has bought 39.99 million tonnes of wheat at minimum purchase prices, down 1.84 million tonnes from the same period last year, according to data from Zhengzhou Grain Wholesale Market. As a result, there isn't much crop left in the market.
Wheat prices in the near term will likely be supported by concerns over corn output reduction, rising demand as well as the government's sales of new wheat at higher than purchase prices, said analysts.
US$1 = RMB6.82 (Oct 13)
