June 30, 2009

Beginning July 1, 2009, China will adjust export tariffs on some products and abolish provisional export tariffs on grains including wheat, rice, soy and industrial products such as sulphuric acid and steel wire.

 

Due to China's abundant grain stocks and guaranteed food security, the abolishment of provisional export tariffs on grain products such as wheat and rice as well as increasing grain exports will stabilise both overseas market demand and domestic grain prices, said Jia Kang, director of the Research Institute of Fiscal Science under the Ministry of Finance. He added that it will also balance supply and demand in the domestic grain market and increase farmers' incomes.

 

China's grain exports have significantly decreased amid the global economic downturn. According to statistics from the General Administration of Customs of China, in the first five months of 2009, China exported a total of 1.46 million tonnes of grain valuing at US$925 million, an on-year drop of 30.5 percent and 13 percent respectively.

 

China has adjusted the grain export tariffs several times in the past in accordance with fluctuations in the international and domestic grain market.

 

In the second half of 2007, grain prices rose significantly in international markets. In order to stabilise the domestic grain market and prevent domestic grain prices increasing to match international prices, the Ministry of Finance announced in late-December that provisional export tariffs would be imposed on grain products such as wheat, corn, paddy, rice and soy as well as their powder forms.

 

Meanwhile, towards the end of 2008, international grain prices began to fall sharply due to the spread of the global financial meltdown. With a five-year consecutive bumper grain harvest, the Ministry of Finance announced that starting from December 1, the five percent export tariff on corn and soy would be removed and the export tariff on wheat and paddy would be decreased to three percent.

 

China enjoyed another bumper summer harvest in June this year with a total yield of 122.5 billion kg, which was the first six-year consecutive growth in grain output since the founding of New China.