January 23, 2006

 

China wheat prices slightly down on thin pre-holiday trade
 

 

Wheat prices in major wheat-producing regions of China fell slightly in the week to Monday, as trading activity has slowed, traders said.

 

"Buyers have already built up enough inventories, while farmers have begun to prepare for the Chinese Lunar New Year. The market has been quiet," said Chen Kang, an analyst with China National Grain and Oils Information Centre.

 

In Henan, China's biggest wheat-producing province, prices of average quality wheat ranged from RMB1,420-1,440/tonne, RMB20/tonne lower from the previous week.

 

In Hebei province, another major wheat-producing base in China, prices were about RMB1,460/tonne, RMB20/tonne lower than the previous week.

 

"Prices will remain at this level this week," Chen said.

 

Wheat prices have remained relatively stable since late December, which is unusual.

 

This is likely because wheat supply is still sufficient, unlike in the past, Chen said, possibly because of a change in dietary patterns.

 

As a result, unlike past years, wheat prices did not rise, and farmers were not eager to sell as they anticipate higher prices, Chen said.

 

"I do not foresee a rise in wheat imports this year, considering the domestic supply and demand situation. Moreover, the government's policy is to ensure that the major source of grains will be domestic," Chen added.