December 16, 2008
 
China wheat prices firmer on reduced government sales, to hold steady
  
 

Wheat prices in China's major producing areas were mostly stronger in the week to Monday (December 15), supported by reduced government sales.


Prices in Anyang in Henan province were around RMB1,740 a tonne, up RMB10 from a week ago. Prices in Jining in Shandong province held steady between RMB1,680/tonne and RMB1,740/tonne.


Last week, the government sold 294,593 tons of wheat in its weekly auctions, or 80 percent of the 369,414 tonnes it planned to sell. Usually in November and December, the government's weekly wheat sales are above 4 million tonnes.


Although wheat-flour demand ahead of the year-end holidays was stronger than in previous weeks, it still wasn't as big as in previous years.


"As migrant workers returned to rural areas due to a lack of job opportunities in the cities amid the global financial crisis, flour demand was affected," said Hai Yang, an analyst at Zhengzhou Esunny Information & Technology Co.


She expects prices to stop rising and be stable if the government increases its weekly sales.


Farmers now have about 30 percent of their crop harvested this year at hand, compared with 50 to 55 percent in the same period last year, the China National Grain and Oils Information Centre said Friday (December 12).