July 28, 2008

Price gap spurs increased grain smuggling in China's Guangdong

China's grain prices, which can be four times cheaper than grains in the international markets, is spawning a surge of smuggling cases in China's Guangdong.

The illegal trade has flourished into a RMB 1.5 billion trade in just the first six months of this year, with 4,167 cases reported, according to the authorities. The number was an eight-fold increase over last year.

China, once a supplier of corn to neighbours such as South Korea and Japan, has virtually banned grain exports since January this year, after rising international demand spurred inflation fears at home.

Luo Ou, director of the provincial anti-smuggling office, at a meeting for combating smuggling on Wednesday (July 23, 2008) blamed rising crude oil prices and the gap between international and grain prices as the main causes.

Li Xiaowu, vice director of the national anti-smuggle office, at the meeting noted that not only grains smuggling are on the rise nationwide but also fertilizers and edible palm oil as well.

The Pearl River Delta, the Yangtze River Delta and the Beibu Bay saw more than 70 percent of the country's smuggling cases.

In Guangdong, Shenzhen saw half of the province's total cases during the first half of the year.