August 24, 2006

China scraps special railway fee for grain exports

China's government has scrapped a key railway fee that domestic grain producers pay when they transport via rail product meant for export.

In a statement Thursday (Aug 24), the National Development and Reform Commission said the Railway Construction Fund fee imposed on grains meant for export has been removed.

A fee of RMB0.033 a tonne for every kilometre was imposed on grains for export, according to local grain bureaus.

The NDRC, the country's top economic planning agency, said the waiver took effect Aug 20 after the approval of the State Council, China's Cabinet.

With that, there is now no special premium placed on transporting grains via rail across China.

The government, in January 2002, scrapped the Railway Construction Fund Fee for the transportation of grains meant for domestic consumption.

Agricultural analysts say lower transportation charges may help China increase its grain exports this year.

China is facing an oversupply situation for its major grain products including soybeans, corn and wheat.

The Railway Construction Fund was set up in 1991 to help finance the expansion of China's railway network.