December 27, 2005

China's wheat prices up slightly on increased demand

Wheat prices in major producing regions of China were slightly higher in the week to Monday on increased demand as Lunar New Year (Jan 29, 2006) approaches.

In Henan, China's biggest wheat-producing province, prices of average quality wheat were quoted at about RMB1,450-1,480/tonne on Monday, RMB30-50/tonne higher than a week earlier, said a trader surnamed Liu with Zhengzhou Grain Trading Centre.

In Hebei province, another major wheat-producing base in China, the price is around RMB1,480/tonne, or RMB20/tonne higher than the previous week.

Meanwhile, prices in Shandong and Jiangsu provinces remain steady from a week ago at RMB1,400-1,460/tonne.

However, traders did not expect sharp fluctuations before the Lunar New Year holidays, which was usually the case in the past.

"Demand is increasing slightly with Lunar New Year around the corner, while processing enterprises did not prepare large stocks, so they need to buy more in the coming month," said Liu.

China's wheat output is estimated to have risen to about 96 million tonnes this year from 91 million tonnes last year. At the same time, imports of wheat from January to November fell 47.9 percent on year.