The export limits were disappointingly small for a country that once ranked as the worlds second-largest supplier of corn, and traders said it was unclear why grain merchants would rush to foreign markets, given higher domestic prices being already buoyed by Beijings scheme to build up government stocks.
However, the fact that Chinese policymakers felt comfortable enough with domestic supplies to open the door to export markets could send a bearish signal to already depressed global prices, suggesting that it may be some time still before the most populous nation needs to import staple foodstuffs to feed its people. Beijing will allow the export of 500,000 tonne of corn, 500,000 tonne of wheat and a small amount of rice, two industry officials with knowledge of the governments plan told Reuters. Other sources put the rice export quota at about 200,000 tonne.
The relaxation on grain exports follows projections for a record 528.5 million tonne harvest in 2008, up 5.4% as farmers worked double-time to cash in on the surge in global prices, despite shrinking arable land and the exodus of farm labour to Chinas booming coastal metropolises.