May 1, 2004

China Corn Traders Hampered By Export Restrictions

Jiang Jianhua, vice manager of Jilin Cereals Group Co., Ltd., says that after the restriction over corn export, the total corn exports throughout China will decrease to 4 million tons in 2004, which will cause outstanding problems to China's corn market.

First, there will be a strange phenomenon "can't sell" & "can't buy". Foreign grain dealers are eager to buy China's corn, and domestic corn exporters are eager to export corn. But China's macro-control and other factors restrict the export, which will result in the conflict between "supply exceeds demand" and "in short supply".

Secondly, China's corn market will be filled with more competition. The policy to restrict corn export will cause 10 million tons of corn to be sold in China's market, and it will cause the corn price to rise.

Thirdly, the restriction will decrease the export and cut down China's international market share, which will destroy the relationship with the international partners and put off the course of China's grain to enter international markets.

Finally, the restriction will also cause the overstock of corn in China.