January 9, 2007

China's Jilin Grains Group suspends corn export

China's Jilin Grains Group has suspended corn export and said no new export contracts would be signed from the end of February. 

A spokesman from Jilin Grains Export and Import Co. Ltd, a subsidiary of Jilin Food Group confirmed that except for current contracts, the company has stopped all corn exports.

Jilin Grains Export and Import Co. ltd is one of two corn exporting firms authorised by the government, the other being China National Cereals, Oils and Foodstuffs Corporation or (COFCO).

The company exports 5 million tonnes of corn annually to more than 20 countries around the world and is authorised to undertake export orders without government oversight.

In November, 2006, China's Development and Reform Commission informed Jilin Food Group and COFCO to halt all new orders after the end of February 2007. This indicated that Chinese authorities would continue to suppress corn exports in 2007 to ensure that the country's corn supply can cater to fast-growing domestic demand.

Jilin Grains Group's assistant general manager Jiang Jianhua said that with the implementation of the measure, China's corn exports should fall drastically for the foreseeable future and nett corn import for China would become a reality.

A source in the Jilin Grains Export and Import Co. Ltd said the measure was a blow to corn exporters in the country as many contracts had to be ended prematurely due to the change in government policy, hurting the credibility of Chinese companies in the process.

Sources in the company also said in 2004 when China corn exports were restricted, Indian exporters stepped in to fill the vacuum. Thus the change in policy this year is expected to have wide-ranging effects for China's corn export industry.