China wheat prices stable and supported by hopes for higher prices
Wheat prices in China's major producing regions were mostly stable in the week to Monday, 3 November 2008, supported by expectations of higher grain prices.
Wheat prices in Xinyang in the major producing province of Henan were at RMB1,680 (US$246) a tonne, stable from a week ago.
Wheat prices in Jining in Shandong province were also around RMB 1,680 / tonne (US$246 / tonne), unchanged.
An increase in the government's minimum wheat purchase prices for next year has boosted expectations of higher wheat prices, so wheat owners are reluctant to sell, said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.
Meanwhile, wheat flour demand remained stable, and wheat processing plants are not willing to build large stocks.
Last week, the government sold 203,712 tonnes of the wheat it has bought under the minimum purchase price programme, or 57 percent of the 360,410 tonnes it planned to sell.
As the government has bought most of the wheat harvested this year, farmers have only a limited amount of wheat left on hand, so they are reluctant to sell, and that is helping to push wheat prices higher, said Zhengzhou Grain Wholesale Market.
Major wheat producing areas such as the Henan, Shandong and Hebei provinces have completed the sowing of wheat for next year, while other major producing areas have almost completed the planting.
Generally speaking, the weather has been good for the wheat planting, said the Ministry of Agriculture.