November 10, 2009
China wheat prices mostly stable
Wheat prices in China's major producing areas were mostly stable in the week to Monday (November 9).
Wheat prices in Ji'nan in Shandong province were around RMB1,970 (US$288.52) a tonne, unchanged from a week ago.
Wheat prices in Zhengzhou in Henan province were between RMB1,970 and RMB1,980/ton, stable from a week earlier.
Cash trading was not active, as traders and processing plants expected wheat prices to remain stable before the Chinese New Year in February, while weak flour demand made it almost impossible for processors to hike flour prices, damping processing plants' willingness to purchase, China Zhengzhou Grain Wholesale Market said in a note.
As the government's weekly auctionsis the main supply of wheat, the market is not focusing on the planting and initial growth of the crop, it said.
The government sold 375,000 tonnes of wheat during its weekly auctions last week, or 21 percent of the 1.8 million tonnes it offered for sale.
The average price was RMB1,855/tonne, up RMB6/tonne from a week earlier.
Declining sales volume in the past three weekly auctions shows that demand from traders and processing plants is dwindling.
Wheat prices are likely to remain stable at current high levels in the near term, while flour prices are unlikely to rise much, analysts said.
US$1 = RMB6.82 (Nov 10)
