China's wheat prices mostly stable
Wheat prices in China's major producing regions were mostly stable in the week to Monday, 27 October 2008, but lower in some areas as farmers increased their sales volumes.
Wheat prices in Xinyang in major producer Henan province were at RMB 1,680 (US$245) a tonne, stable from a week ago.
Wheat prices in Jining in Shandong province were also around RMB1, 680 / tonne (US$245), down RMB10-RMB20 (US$1.50 - $3) from a week before.
Earlier state purchases of wheat in Henan province were big and farmers do not have much stock at hand. As a result, wheat prices in the area were decided by the government's regular auctions, said traders.
The government sold 276,987 tonnes of wheat it bought under the minimum purchase price programme, or 78 percent of the 355,400 tonnes it planned to sell.
However, farmers in areas such as Hebei and Shandong provinces have a lot of stocks and were more willing to sell their wheat due to higher prices, said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.
Meanwhile, flour demand did no;t pick up significantly, although the traditional high consumption season is approaching.
Farmers will be reluctant to sell wheat if prices are heading lower, as they know that the government's supporting policies will help push up prices, said analysts.
The National Development and Reform Commission said last month that the government will buy wheat from the new crop in 2009 at prices 13-15.3 percent higher than those offered during the current season.