China looks set to resume long-awaited corn exports as soon as March, helped by high international prices, while the spread of the deadly bird flu is eating into domestic demand for animal feed.
Traders said on Tuesday there was talk Beijing would issue the first batch of 2004 corn export quotas before the end of February, paving the way for the first shipment since the end of December.
They have yet to see export offers. Yet some also heard rumours that Jilin Grain Group (JGG), one of China's two authorised corn exporters, was told by the government to get ready to start shipments in March.
"It is highly possible that they (China) start exports for March shipment," said a trader based in Tokyo, who had just returned from a trip to China."
"The only question is the amount. Most see Chinese exports at three to four million tonnes in calendar 2004, maybe a maximum of five million.
With the total amount so small, they are unlikely to issue all quotas in one go." In 2003, Chinese corn exports reached a record 16.39 million tonne, with South Korea alone taking as much as 8.04 million.
No official at JGG or COFCO, the other exporter, was immediately available for comment.
The traders said Beijing had decided to keep the rebate of the 13 percent value added tax (VAT), while scrapping all other financial supports for corn exports.
It was unclear which prices to use for calculating the tax rebate.
Still, the traders agreed Chinese maize would be competitive to Asian destinations.
US corn was seen as expensive at $205 per tonne or more for cost and freight South Korea for April delivery, compared with around $120 a year ago, due to high freight rates and firm Chicago prices.
In the domestic market, bird flu weighed on corn prices, they said. Fears of the disease discouraged farmers from stocking baby chicks following the Lunar New Year celebrations in January.