China wheat prices mostly stable amid weak consumption season

 

 

Wheat prices in China's major producing areas were mostly stable in the week to Monday as consumption hasn't been as active as it was before the October 1-8 holidays.

 

Wheat prices in Zhengzhou in Henan province were around RMB1,960 a tonne, compared with RMB1,950/tonne a week earlier.

 

Prices in Xuzhou in Jiangsu province were unchanged at RMB1,930/tonne.

 

Farmers were not eager to sell the remains of the crop as they have sold most of their wheat to the government.

 

Government price-support policies issued last week had little impact on the market as cash prices are already higher than the minimum purchase prices set for next year's crop, analysts said.

 

China will raise its minimum purchase prices for wheat in 2010 by RMB60/tonne to RMB1,720-RMB1,800/tonne to encourage farmers to grow grains.

 

The market widely expects that the increase in purchase prices will result in higher government wheat sales prices next year, and that is continuing to support cash prices.

 

During its weekly sale of the wheat bought under minimum purchase prices in previous years, the government sold 834,708 tonnes of wheat, 47 percent of the 1.77 million tonnes it planned to sell.

 

Wheat prices are likely to remain mostly stable in the near term, with factors driving recent increases already priced in, said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.

 

US$1 = RMB6.82765 (Oct 19)