April 21, 2009
China wheat prices stable on government support policies
Wheat prices in China's major producing areas were stable in the week to Monday (April 20), largely due to sustained support from government policies despite sluggish wheat demand.
White wheat prices in Jinan in Shandong province were between RMB1,870-RMB1,880 a tonne, unchanged from a week earlier.
Wheat prices in Fuyang in Anhui province were around RMB1,820/tonne, stable from the previous week.
White wheat prices in Zhengzhou in Henan province were around RMB1,800/tonne, also steady from a week ago.
Analysts attributed the firmness in wheat cash prices to Beijing's auctions, which have lent support to wheat prices even though demand remains sluggish.
The government launched a nationwide check of grain stocks last week, and wheat sales at state-owned companies have since fallen sharply on quality issues, helping to support prices, said analysts.
Dire wheat flour sales in the domestic market indicated that demand isn't picking up, and "without the government's policies, things would be a lot different," said Xu Wenjie, an analyst with Tianma Futures.
