China Grain Trader May Export More Wheat and Corn

With China's production and market prices both looking up, the country's largest grain trader may up exports.

The largest grain trader in China, China National Cereals, Oil & Foodstuffs Corp., is ready to export more corn and wheat in the 2006-07 market year. This position is a result of rising international market prices and solid domestic production in China, a company official said Tuesday.

The 2006-07 corn output in China is currently expected to be 141 million metric tons, with an additional expected 105.3 million tons of wheat, according to government-backed think tank ChinaNationalGrain & OilsInformationCenter.

Yu Xubo, vice general manager of COFCO, says exports will keep grain stocks at a reasonable level while supporting domestic prices, but did not state how much export quotas can be expected. "The government will review overall domestic demand and grain reserves before releasing export quotas," he says. COFCO is owned by the Chinese government.

Yu added that production may exceed demand in China in 2006-07.

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