December 1, 2003

China's 2003 Corn Exports Seen Reaching 15 Million MT

China's corn exports in the 2003 calendar year could reach 15.00 million metric tons or more, as exporters rush to ship as much as possible by the end of this year to take advantage of the current financial support for corn exports, traders in China said Friday.

Talk has long circulated in the markets that China might remove part of the complex financial support for corn exports from the beginning of 2004.

"Some of the financial support could be scrapped next year, most likely the storage subsidies," a trader from China National Cereals Oils and Foodstuff Import & Export Corp, or Cofco, said Friday.

Currently, corn exporters enjoy three-pronged financial support, including an export value added tax rebate, exemption of railway construction funds, and storage subsidies.

The government's policy is in favor of providing more direct support to grain producers from 2004. The current storage subsidies for corn exports are likely to be transformed into direct support to farmers instead, said the Cofco trader.

In the first 10 months of 2003, Chinese corn exports are pegged at 12.25 million tons, 46% higher than the same period of 2002, customs figures show. In the 2003 calendar year, China's corn exports are forecast to hit 15.00 million tons, traders in China said Friday, citing the latest data from a government-backed grain think tank.