China Playing Greater Role in Global Grain Market

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Last updated at: (Beijing Time) Wednesday, March 05, 2003

China Playing Greater Role in Global Grain Market

As a country that yields and consumes a huge proportion of the world's grain, China is seeing rapid growth in its grain trade with foreign countries.

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As a country that yields and consumes a huge proportion of the world's grain, China is seeing rapid growth in its grain trade with foreign countries.

In February, the regular quotation for world wheat exports released by Reuters began to list the wheat price at the Commodities Exchange in Zhengzhou, capital of central China's Henan Province and the country's major grain producer.

Reuters' quotation has since publicized daily the wheat forward price at the Zhengzhou Commodities Exchange, which is China's first forward exchange exclusively for farming produce.

"This has put China's wheat exports information on the same level as the United States, Canada, Australia and other traditional wheat export countries," said Wang Xianli, president of the exchange.

"This also lists the wheat forward price at Zhengzhou together with that at Chicago," Wang added.

Last year, China's wheat exports surpassed imports for the first time, and its corn and rice exports have also posted considerable increase.

In January this year, China exported a total 40,170 tons of wheat, and has become an important wheat supplier for southeast Asian countries.

"The trade of wheat, corn and rice for China has closely interacted with the global market," said Yu Xubo, vice president of the China Grain and Oil Import Corporation, stressing this change is "unprecedented".

Meanwhile, following its entry into the World Trade Organization (WTO), China has lowered tariffs for grain imports, increased its grain imports quota and lifted various non-tariff barriers, which has made it a large market for major world grain producers.

To provide people with adequate food has always been a serious issue for the world's most populous country.

With its history of catastrophic famines, the latest occurring in the early 1960s, some foreigners worry China may fail to feed its population and bring great panic to the whole world.

In recent years, thanks to planting quality seeds, improving irrigation conditions and other favorable measures, China's grain yield has remained stable and risen steadily, reaching 457.11 million tons in 2002, up 1 percent over the previous year.

Out of the concern about the shortage of grain supply, China has always attached much more importance to the grain yield than to the quality.

However, China has come to value more the quality of its grain products and more high-grade grain species are being widely grown,which has remarkably boosted China's grain exports.

In addition, China has constantly been improving its domestic grain market system, which now mainly comprises forward markets, state-level wholesale markets and local markets.

The increasing interaction between China's domestic grain market and the international grain market indicates China's agricultural structure is greatly improved, which will help guarantee the security of China's grain supply and improve farmers' income, experts say.

In 1996, China started a series of pilot projects in many areas across the country to grow some high-quality grain species in different ways in line with international standards, which has greatly improved grain exports and brought more income to farmers.

The domestic and international markets are complementary and mutually beneficial, as importing some grains can meet the necessary demand on the domestic market, while exporting certain high-quality grains may help earn more money, said Ding Shengjun, a researcher with the State Grain Administration of China.

In a central government conference on rural work held in January, Chinese Vice-Premier Wen Jiabao stressed that as a country with a large population of farmers, China should play the role it deserves in the world's farm produce trade.

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