China wheat prices higher on rising flour demand, tight supply

 

 

Wheat prices in China's major producing areas were mostly higher in the week to Monday tracking a rise in flour demand and fall in supply.

 

Prices in Shijiazhuang in Hebei province were RMB2,080-RMB2,110 a tonne, up RMB20-RMB30 from a week ago.

 

Prices in Dezhou in Shandong province were between RMB2,040-RMB2,050/tonne.

 

Processing plants and feedmeal plants increased purchases due to higher demand, while farmers were reluctant to sell amid rising prices and tightening supply.

 

The recent heavy snowfall in major wheat growing areas affected transportation, and farmers' efforts to sell their crop.

 

The planting of the winter crop has almost completed but steps must be taken to protect it from low temperatures, said analysts.

 

Wheat flour demand will likely pick up towards the end of the year due to holiday consumption, sending wheat prices higher, according to an analysis report published on Chinese Grain Web.

 

Last week, the government sold 374,700 tonnes of wheat during its weekly auctions, or 21 percent of the 1.8 million tonnes it planned to sell.

 

The average price was RMB1,856/tonne, up RMB7 from a week earlier.

 

US$1 = RMB6.82739 (Nov 16)