July 3, 2007

Good weather may bring higher China corn exports
 

China will likely issue a supplemental export quota for corn if the weather is good in July and August, a crucial period for the harvest, an official with a major state-owned corn trader said.

China will "definitely" grant a further quota for exports if the weather supports production because stocks remain plentiful ahead of the harvest, said Jiang Jianhua, Jilin Grain Group's vice chairman.

The country set an export quota of 1.4 million tonnes in March that expires at the end of the year.

"There will be no problem using the quota on time," Jiang said.

He suggested that China considers issuing the supplemental quota before the September harvest season in the United States and China, as global supply will be ample by then.

In the meantime, corn prices are unlikely to rise, because traders in Jilin province have 2-3 million tonnes in stock, state-owned enterprises in the province have a combined 16.6 billion tonnes, and processing plants in the province have 4.1 billion tonnes, Jiang said.

China will become a net corn importer later on, but probably not within the next two years, Jiang said.

The country should allow corn imports in the future because land supply and water resources are limited, he said.

On Monday (Jul 2), the China National Grain and Oils Information Centre raised its forecast for the country's corn output in 2007 to 149 million tonnes from 147 million tonnes.