China to export 500,000 tonnes of corn in 2009
With domestic supply as priority, China will allow only 500,000 tonnes of corn exports next year, down sharply from the previous consideration of 5 million tonnes.
The 500,000 tonnes quota is less than 1 percent of world corn trade and is unlikely to hurt the US share of the Asian market, said traders.
The quota is much less than what the market has expected, and there will not be immediate exports as current prices dictate whether the permits will be issued or not, said Nie Ben, manager at Shanghai Continent Futures Co.
Traders also speculated that the expensive Chinese grain would not be attractive to buyers.
"Domestic prices are still higher than US corn. I don't think we can export," said a trading manager with Jilin Grain Group, one of two authorised corn exporters. The manager said Beijing had not agreed to offer any financial support on exports.
China shipped over 5 million tonnes of corn in 2006-07, said USDA. In comparison, China's corn exports plunged 96 percent to 210,000 tonnes in January to October, after the government stopped issuing export quotas in a bid to increase domestic supplies. The USDA in November projected China's corn exports in 2008-09 to reach 500,000 tonnes.
COFCO Ltd., Jilin Grain Group Co. and three smaller companies received export permits, according to sources. The amount of exports is worth about US$73 million at current prices, and more permits may be issued later in 2009 if the government deems it necessary, said the sources.
COFCO and Jilin Grain will each have an export quota of up to 150,000 tonnes of corn, a company affiliated with Heilongjiang province received 100,000 tonnes of quota, while firms in Inner Mongolia and Liaoning each received 50,000 tonnes, said traders.
The China National Grain and Oils Information Center said on December 10 that China's corn harvest may rise to a record 156 million tonnes on favourable weather and increased plantings.
China will also allow the export of 500,000 tonnes of wheat, according to industry officials.