Abolishing provisional export tariffs on grain products will stabilize overseas market demand

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jun 2009

From July 1, 2009, China will adjust export tariffs on some products and abolish provisional export tariffs on grains including wheat, rice, soybean and industrial products such as sulphuric acid and steel wire. With plentiful grain stocks and guaranteed food security, abolishing the provisional export tariffs on grain products such as wheat and rice and increasing grain exports will not only stabilize overseas market demand, but also balance supply and demand in the domestic grain market, stabilize domestic grain prices and increase farmers' incomes, said Jia Kang, director of the Research Institute of Fiscal Science under the Ministry of Finance.
Under the impact of the international financial crisis, China's grain exports have significantly decreased. According to statistics from the General Administration of Customs of China, in the first five months of 2009, China exported a total of 1.46 million tons of grain with a value of 925 million USD, a year-on-year drop of 30.5 percent and 13.0 percent respectively.
China has adjusted grain export tariffs several times in the past in accordance with fluctuations in the international and domestic grain market.
In the second half of 2007, grain prices rose significantly in international markets. In order to stabilize the domestic grain market and prevent domestic grain prices rising to match international prices, on December 30, 2007 the Ministry of Finance announced that provisional export tariffs would be imposed on grain products such as wheat, corn, paddy, rice and soybeans, as well as their powder forms.
At the end of 2008, with the spread of the global financial crisis, international grain prices began to fall sharply. With a five-year consecutive bumper grain harvest, the Ministry of Finance announced that starting from December 1, the 5 percent export tariff on corn and soybean would be abolished and the export tariff on wheat and paddy would be decreased to 3 percent.
In June this year, the country enjoyed another bumper summer harvest with a total yield of 245 billion jin (1 jin = 0.5 Kg), marking the first six-year consecutive growth in grain output since the founding of New China.

Source: People’s Daily Online