Wheat prices in China remains inconsistent

China's wheat prices in major producing areas were stable in some regions and higher in others in the week to Monday, as supply tightened.

Wheat prices in Zhengzhou in Henan province were around RMB2,000 a tonne, unchanged from a week earlier.

On the other hand, wheat prices in Dezhou in Shandong province were RMB2,080-RMB2,100/tonne, up from RMB2,060-RMB2,080.

With an improvement in weather conditions, wheat supply recovered and the prices are stabilising as a result.

The government controls most of the supply through its purchasing programme, however, so farmers don't have much stock on hand to sell.

Last Wednesday, the government sold 500,400 tonnes of wheat during its weekly auctions, or 30 percent of the 1.67 million tonnes it offered to sell.

The average price was RMB1,850/tonne, up RMB5/tonne from a week earlier.

Wheat prices are likely to rise slightly as demand increases heading into the year-end holidays, but gains are unlikely to be large as prices in many producing areas have already risen sharply in recent months, and stable government supply will help to stabilise prices, the Chinese Grain Network said in an analytical report.

US$1 = RMB6.82846 (Nov 30)