China will resume corn export before entering WTO

Lead: China is due to resume export sales of corn Thursday as Beijing is keen to cut its huge corn stockpile before joining the world trade organization, Asian traders said Wednesday Traders say Beijing wants to cut its corn stocks, which are now estimated to be about 40 million tonnes, as Chicago's corn futures are being repaired "Whatever the data, the Chinese government believes that there is more inventory than it needs," said one trader from Hong Kong's leading international trade bank They want to reduce some of their inventory When China joins the WTO, the government wants to allow millions of tons of corn to be imported each year " After China's accession to the World Trade Organization early next year, it will be required to open up imports into the domestic corn market and eliminate export subsidies To the surprise of many in Asia, the U.S Department of Agriculture said last month that private exporters reported sales of 165000 tons of U.S corn to China in the 2001 / 02 market year The lowest price in China's last bid, held in May, was considered too high compared with international prices But unlike the last bid, traders said this week's bid will attract many buyers, such as South Korea and Malaysia Despite Tuesday's slight correction in Chicago prices, US corn's CNF price in South Korea is still between $115 and $117 per ton, with September's shipping schedule South American corn prices range from $112 to $113 per ton If sold at $105 per ton FOB, the CNF price of Chinese corn in South Korea is about $111 per ton South Korea has traditionally been China's biggest customer of corn If the price difference between Chinese and American corn reaches $5 per ton or more, South Korea expects to purchase Chinese corn The bidding was also held at a time when domestic corn prices were weakening China shipped more than 10 million tons of corn last year due to high domestic corn prices, which has hindered corn exports so far this year According to traders, the price of domestic corn in China's consumer areas is about 1200 yuan (US $144.58) per ton The price of corn in the production areas is less than 1100 yuan per ton, 10 yuan lower than the peak price seen in the past few months Traders attribute the price weakness in part to the fact that new corn has not been greatly affected by the drought, which has been a source of concern China's corn production is expected to reach 110 million to 115 million tons, compared with previous estimates of 105 million to 110 million tons By contrast, China's corn output last year was 1.06 million tons, when it was severely damaged by the drought, and China's annual corn consumption is estimated to be 1.10 to 1.15 million tons China raised its export subsidies at RMB368 a ton at the beginning of this year, a move some believe is aimed at accelerating the reduction of corn stocks Traders said that due to the differences between the provinces, it is not clear how much corn export subsidies are now, but most people agree that the export subsidies are higher than 400 yuan (48 US dollars) per ton.