March 28, 2006

 

China wheat prices continue to fall slightly on oversupply

 

 

Wheat prices in most parts of China continued to fall slightly in the week ending Mar 27 on oversupply, analysts said.

 

Supply has risen as farmers sold stocks to raise funds for spring plowing, and warehouses have released stocks as well. However, sluggish flour sales have prevented mills from buying more than they need, said Chen Kang, an analyst with National Grain and Oils Information Centre.

 

Prices of average quality wheat fell RMB20 to around RMB1,320-RMB1,340 a tonne in Henan, China's biggest wheat-producing province.

 

In Hebei, another major wheat-producing province, prices were RMB30 lower at RMB1,380-RMB1,400/tonne.

 

The average price in Shandong province fell by RMB20 to around RMB1,400/tonne.

 

"We still don't see any factors that can drive prices in the short run," said Chen.

 

Meanwhile, although there are reports about a drought in Hebei province, Chen said wheat growing hasn't been seriously impacted, based on the areas they have been monitoring.

 

"We're still optimistic about a good harvest of wheat this year," Chen said.

 

China's wheat imports slumped 99.4 percent on year to 2,303 tonnes in February, and fell by 96.1 percent on year to 47,276 tonnes in the January to February period, the General Administration of Customs said Monday.

 

The figures are not surprising, Chen said, given ample local output and stocks, plus the country's plan to be self-sufficient in grain production.

 

The trend of lower imports is not likely to be reversed, he added.