China, the world's second-biggest corn grower, will allow 500,000 metric tons of the grain to be exported next year, about 10 percent of levels seen in previous years, as the government seeks to ensure domestic supplies.
Cofco Ltd, Jilin Grain Group Co and three smaller companies received export permits, said three people familiar with the matter, who declined to be identified as the issue is confidential. That amount is worth about US$73 million at current prices. More permits may be issued later if the government deems it necessary, they said.
China, which earlier was considering allowing as much as 5 million tons to be exported, had been expected to issue fewer permits to control prices and ensure domestic supplies. The 500,000-ton quota is less than 1 percent of world corn trade and unlikely to erode United States sales into the Asian market.
"This is much, much less than what the market has expected, it amounts to nothing," Nie Ben, manager at Shanghai Continent Futures Co, told Bloomberg News from Dalian. "Still, the current prices dictate if permits are issued or not. We won't see immediate exports."
Chinese corn exports plunged 96 percent to 210,000 tons from January to October, Customs data showed.
(Shanghai Daily December 31, 2008)
