China's grain exports are expected to continue to grow rapidly this year because international grain prices and market demand are favourable, COFCO Vice-President Yu Xubo told China Daily.

China's corn is at least US$20 cheaper per ton than that of the United States or South Korea.

He estimated the firm will export at least 1.2 million tons of wheat, 5 million tons of corn and 1.7 million tons of rice this year, compared with 700,000 tons, 3.95 million tons and 1.66 million tons of last year respectively.

State-owned COFCO is China's largest grain exporter. It monopolizes the country's wheat exports and makes up 48 per cent of its corn exports and 97 per cent of rice exports, company data showed.

Yu said grain export is mainly determined by domestic policies and supply-and-demand situation on the international market and SARS has little impact.

Both the firm's transaction and shipping volumes of wheat, corn and rice more than doubled compared with the January-April period last year, according to company statistics.

The growth momentum was retained in the single month of April, but May statistics are not presently available to show how much the SARS outbreak in mid-April has influenced China's grain exports.

Yu admitted, however, that short-run domestic transportation, mainly by rail, and ship loading have become more complicated due to disinfection requirements.

Business trips to and from major grain producing areas, which are necessary for purchases and quality supervision and inspection, have become extremely difficult because people flow is strictly controlled during the epidemic period, he said.

The firm, like many other companies in China, had some of its employees work at home during the period in order to reduce interpersonal contact.

Yu said employees have reduced face-to-face communications with foreign clients and turned more to telephones, e-mails or fax machines.

"Although Japanese clients are a bit worried, few have raised SARS as an issue," said Yu.

He said that even if some clients ask for SARS virus-free certificates, they are affordable and available from the State General Administration of Quality Supervision and Inspection and Quarantine.

He said employees resumed normal work at the end of May and the firm is actively communicating with local governments and quality supervision and inspection and quarantine offices so that SARS will not become a block to the domestic grain trade.

China's grain exports saw surprising high growth last year due to surplus stock at home and rising international prices.

Exports of wheat, corn and rice grew 26.4 per cent, 567.5 per cent and 12 per cent year-on-year respectively, customs data showed.

But domestic surplus grain stocks are not expected to last long and it is impossible for China to export large quantities of these land-intensive agricultural products in the long run, said trade experts.

China's land-intensive agricultural products lack competitiveness on the international market because the average land area of individual Chinese farmers is 0.5 hectares, only 1/40 of the European Union and 1/400 of the United States.

(China Daily June 6, 2003)