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China corn export

opportunity seen narrowing

BEIJING: China's window of opportunity for taking advantage of high world corn prices to start exporting is closing fast, traders in China said on Wednesday.

"We only have a two-month window because most buyers have coverage up to June and would want to pick up for July/August," a Chinese trader said.

"They (the Chinese) have the capability to export two million tonnes, but if they wait a week they will only be able to sell 1.5 million," he said.

"And if they wait another week after that, they will only be able to sell one million tonnes," he said.

A spokesman for China's central food trading arm, the National Cereals, Oils and Foodstuffs Import and Export Corp (Ceroils), told Reuters the decision rested with the State Planning Commission.

"If the State Planning Commission comes up with a plan we will begin to export," he said by telephone.

Traders who met Chinese Vice Premier Zhu Rongji last Friday said China's economic tsar had made it clear the decision on when and how much corn to export was up to him.

"It looks like they will open it up a little bit," another Chinese source said.

China's central authorities had already decided to lift a ban on corn exports, imposed in December 1994, after intense lobbying by the governors of the three growing provinces, Heilongjiang, Jilin and Liaoning, a trader involved in negotiating with top-level Chinese grain officials said.

Regulations introduced last year make the provincial governors personally responsible for the grain situation within their borders.

Traders have been citing prices in the northeastern corn belt below 1,000 yuan ($120) per tonne for the past month. But a lack of cash meant neither government grain bureaux nor domestic trading companies could buy, even at that price.

By contrast, corn prices on the Chicago Board of Trade continue to soar, touching an all-time high of $4.79 in Monday trading, before rising further in Asian trading time to hit $4.80 on the after hours Project A trading system.

China's current corn crop is expected to be around 108 million tonnes, according to estimates by the U.S. Department of Agriculture. Annual demand is around 110 million tonnes.

One trader involved with drawing up the export contracts for China has said 1.5 to two million tonnes would be exported to smaller Japanese and South Korean ports from the northern port of Dalian at $185 a tonne, free on board.

Traders throughout the region report great interest in picking up the bargain Chinese prices, as U.S. corn had been arriving in Asian ports at $207 to $210 a tonne.-Reuter