ChinaOnline
(23 February 2001) Although China's corn exports hit a record high of 10.4 million tons in 2000, the government predicts an overall decline for 2001.
Government procurement for corn in the 2000-2001 harvest season was very low. In Heilongjiang province, it was down by 50 percent from 2000. In addition, farmers are reluctant to sell out their reserves since the domestic price of corn is running relatively high. As a result, the government expects a drop in the volume of corn eligible for exports, reported the Feb. 20 Qihuo Ribao (Futures Daily).
The State Grain and Edible Oil Information Center has made a contradicting prediction, however, asserting that China will still have an oversupply of corn in 2001 as its production is estimated to reach 133 million tons in the year. A source from the Chicago Mercantile Exchange also told ChinaOnline that he was skeptical about the anticipated drop of China's corn exports in 2001.
Domestic market or export
The corn price in the corn-growing provinces in northeastern China is comparatively high, at 1,000 renminbi (US$120.96) per ton in Heilongjiang, higher than those of harvests in 1999 and 2000. Further price increases are expected by corn purchasing firms, which expect domestic prices to exceed export prices and prefer to focus their domestic distribution efforts.
Strict quality inspection on exported corn and low export profits also tie these firms' marketing focus to domestic sales. With the Chinese government eliminating export subsidies-a likely outcome if China obtains the World Trade Organization membership by mid-2001-China's corn export in 2001 is likely to drop.
Currently, the Southeast Asian countries and South Korea are the main markets for China's corn exports. In South Korea, in particular, Chinese corn makes up the biggest share of imported corn. This is because more South Korean firms are refusing to import U.S. corn as the public opposes transgenosis technology, which incorporates the genes from different species into one, the Futures Daily article said.:
