January 7, 2004

 

 

2003/04 China's Corn Export Forecast Drop to 6.5 Million MT

 

An eFeedLink Exclusive Report

 

According to Chinese industry sources, China's total corn exports for 2003/04 (from October 2003 to September 2004) is forecast to drop to 6.5 million metric tons, less than half of the total corn exports in 2002/03. Official figures put China's 2002/03 corn export at a high of 15.24 million tons.

 

China's unpredictable corn export policy has adversely affected the country's corn export capability. Moreover, the persistent transportation problems in the northeast region as a result of the inadequate railway system had resulted in numerous delays in corn shipment for exports. Thus exporters have been unable to arrange corn exports in large quantities before the end of 2003.

  

In early December 2003, the USDA forecasted that China's corn export for 2003/04 will be 8.5 million tons.

 

Trade participants in China concur that the USDA's forecast of 8.5 million tons of Chinese corn export is unrealistic as China's corn export in the fourth quarter of 2003 was relatively lower than expected due to the limited transport capacity from the corn-producing regions to major Chinese ports.  

 

According to China Customs Authority, China exported a total of 2.39 million tons of corn from October to November 2003.

 

Industry insiders revealed that China's corn exports during the fourth quarter of 2003 amounted to 3-3.5 million tons, which is fairly lower than the previous forecast of 5 million tons.

 

Recently, China had announced an increase in railway transportation cost due to the tight supply of coal. 

 

Market analysts point out that restrictions in China's corn exports differ greatly in the fourth quarter of 2003 and the year 2004. Transportation problems plagued the earlier period, while governmental corn export policies will influence the later period.

 

Traders in China foresee that the country's corn exports may come to a standstill during the first few months of 2004, as the Chinese government is poised to announce a new corn export policy, possibly in late February or March. Traders believe that corn exports could fall drastically in the coming weeks prior to the announcement of the export policy.

  

In view the reduced corn output in 2004 and the gradually decreasing corn stockpiles, market analysts forecast that the Chinese government is likely to reduce financial support for 2004 corn exports.