March 10, 2008

 

China wheat prices mostly stable due to government auctions

 

 

China's wheat prices were mostly stable in the week to Monday, with regular government wheat auctions supporting the market.

 

Wheat prices in Linyi in Shandong province, a major wheat producing region, were around RMB1,600 a tonne, stable from a week ago.

 

Prices in Henan province were RMB1,540-RMB1,560/tonne, stable from a week earlier.

 

However, wheat prices in major consumption regions were slightly higher due to dwindling stocks.

 

Last week, China sold 1.01 million tonnes of wheat it had bought at minimum purchase prices last year, or 23 percent of the 4.4 million tonnes it planned to sell.

 

The country also sold 957,200 tonnes of imported wheat from state reserves, compared with 980,000 tonnes it planned to sell.

 

Supply in the market increased as state reserve enterprises started to sell old wheat to make room for the arrival of newly-harvested wheat from May, while farmers sped up sales as they need cash for the preparation of spring planting.

 

Meanwhile, the government's regular auctions has helped support market prices, said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.

 

Meanwhile, dwindling stocks will help support wheat prices, she added.