January 5, 2004

China's Jilin Grain Group To Push Corn Exports

Chinese corn exporter Jilin Grain Group (JGG) announced the fulfillment of last year's sales contracts and is set to further push corn exports once the government announces a new export policy, a senior official said on Monday.

There had been worries that China, the world's number two corn exporter, wasn't going to have enough grain to fulfil sales commitments made in 2003, as exporters rushed to lock in contracts ahead of a new export policy to be announced in 2004.

The market had speculated that export subsidies would be scrapped under the new policy, making it costlier to ship corn overseas and thus less competitive on global markets.

"Our company has already fulfilled all the contracts for last year. We stopped signing contracts in about October last year and we're still awaiting the government's corn export policy," JGG vice president Jiang Jianhua said.

China is also unlikely to import corn in the near term as domestic prices are expected to fall further, Jiang said in an interview, squashing market speculation that the country was set to buy up to four cargoes of U.S. corn.

That speculation helped boost Chicago Board of Trade (CBOT) futures on Friday. CBOT March (CH4) corn futures topped the key $2.50 per bushel level on the rumours, which could not be confirmed in overseas and Chinese markets.