October 23, 2007

 

China wheat prices stable, supported by lower sales by farmers

 

 

China's wheat prices were stable in the week to Monday (October 22), supported by slower selling progress as farmers were busy with the autumn sowing.

 

The ex-factory old wheat prices of state-owned companies in Zhengzhou city, Henan province, a major wheat producing region, were between RMB1,540 to RMB1,580 a tonne, unchanged from a week earlier.

 

The ex-factory old wheat prices of state-owned companies in Jinan city, Shandong province, were between RMB1,560 to RMB1,620/tonne, unchanged from a week ago.

 

The enter-factory new wheat prices of state-owned companies in Shijiazhuang city, Hebei province, were between RMB1,560 to RMB1,600/tonne, unchanged from a week ago.

 

Earlier rains have delayed the sowing process of winter wheat, and farmers were busy with the sowing this week while having no time to sell the wheat, said China National Grain & Oil Trade Centre.

 

Wheat processing companies were also not eager to buy as there was sufficient supply, Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co., said in her note.

 

Last Thursday, China sold 278,500 tonnes of domestic wheat bought under the minimum purchase program, or 19 percent of the 1.48 million tonnes it planned to sell.

 

The amount was lower than the 359,800 tonnes the government sold in the previous week, showing that demand was stable.

 

China has been selling a small amount of new wheat it bought in 2007 during the weekly wheat auction since last month to meet domestic demand.

 

China's wheat prices will be stable in the near term, despite strong demand, as the government has increased sales volume of wheat and cut auction prices, the Ministry of Agriculture said.

 

China will sell 200,000 tonnes of imported wheat from state reserves in an auction Thursday, part of its regular sales per month launched recently.