Twelve-thousand tons of corn will be transported from Qinhuangdao on the mainland to Kaohsiung in Taiwan in mid-November, said Gu Lifeng, general manager of the corn subsidiary of the China National Cereals, Oils and Foodstuffs Import and Export Corp (COFCO). The cargo is expected to reach Kaohsiung in late November or early December.

Taiwan early this month temporarily lifted its five-decade ban on corn imports from the Chinese mainland after trade with the United States was disrupted by the West Coast lockout in October.

Taiwan authorities intend to resume the ban in 2003 but business insiders said Taiwan could import as much as 50,000 tons of corn from the Chinese mainland in 2002 if customs passage goes smoothly to Kaohsiung.

The other major Chinese corn exporter, the Jilin Grain Group (JGG), is negotiating a 20,000-ton contract with a Taiwan feed firm, said sources close to the company.

The cargo is to be delivered in late November, sources said.

Company officials were not available for comment.

The Chinese mainland is the world's second largest corn exporter after the United States with annual exports totalling 6.41 million tons in the past five years.

Taiwan imports 4 to 5.5 million tons of corn each year, 90 per cent of which comes from the United States.

Taiwan authorities had continued to ban corn imports from the Chinese mainland despite the two sides' entry into the World Trade Organization last year.

Despite the strong wish of Taiwan firms to purchase more corn from the mainland, which is US$10 cheaper per ton than the United States, business insiders say they don't expect mainland corn to flow to the island in large amounts in the near future.

Transportation costs are high due to a ban by Taiwan authorities on direct cross-Straits links, which forces cargo between the two sides to go through Japan, or the Hong Kong and Macao special administrative regions.

Experts add that the United States will not stand by if Taiwan were to dramatically increase its corn imports from the Chinese mainland in the near future. Taiwan currently makes up 10 per cent of US corn exports.

Mainland corn shipments to Taiwan are also expected to drive down the futures price of corn in Chicago and make US corn more price competitive.

(China Daily November 12, 2002)