January 14, 2004



China December Corn Exports Hit Record, Beating Expectations


China exported 3.28 million metric tons of corn in December, creating a new monthly record, the China Securities newspaper reported Wednesday, citing data from the General Administration of Customs.


During 2003, China exported 16.39 million tons of corn, up 40.4% from 11.67 million tons exported in 2002, said the report.


China Securities is a subsidiary of the official Xinhua News Agency. China's custom office usually announces trade data around the 20th of each month, but state agencies often get the data in advance.


According to the report, exports during October-December 2003, the first quarter of the current marketing year ending September 2004, hit 5.67 million tons, beating expectations of industry sources and analysts.


Local grain analysts had earlier said October-December exports could hit 5 million tons as exporters rushed to ship as much corn as possible before the end of 2003.


"Chinese corn exporters rushed to export corn in late 2003 out of fear that they might not be able to enjoy the same amount of export support (subsidy) in 2004. But a figure of 5.67 million tons is beyond most people's expectations," a grain analyst with a local brokerage house in Dalian told OsterDowJones.


The official export figure for November, for instance, was only 858,522 tons, a relatively low figure. Some analysts, however, caution the figure may not reflect actual exports in November.


"I don't think China really exported so much corn in a single month (in December). The huge increase in exports in December is likely to be the result of reporting delays" and should contain some November exports reported in December, said a trader with China National Cereals, Oils and Foodstuff Import & Export Corp, or Cofco.


Because of administrative delays, exports sometimes get reported in the following month or even later, traders said.




China's corn exports in the 2003-04 marketing year are forecast around 8 million tons, according to the latest figures from the U.S Department of Agriculture.


"If that forecast holds true, China only has to export 2.33 million tons of corn in the January-September 2004 period, which seems to be (rather) low. My guess is that the USDA will have to adjust (the forecast) later," said a market analyst with a local brokerage house in Beijing.


In the 2002-03 marketing year, China exported a record 15.24 million tons of corn, according to USDA estimates.


China is expected to resume corn exports from late March or early April, once the government announces the new export policy, traders in Beijing said. There is still around 20 million tons of corn held in stocks in Jilin, the top corn producing and exporting province in China, they said.


High ocean freight rates and soaring U.S. corn prices will help China keep some of its market share in the neighboring Asian markets, such as South Korea, traders said.


All of this points to the possibility of China exporting more corn than expected in 2003-04, traders said.