Required Report - public distribution

**Date:** 3/1/2008

**GAIN Report Number:** CH8012

CH8012

**China, Peoples Republic of**

**Grain and Feed**

**Annual**

**2008**

**Approved by:**

![](media/image1.wmf)William Westman

AgBeijing

**Prepared by:**

Jorge Sanchez and Jiang Junyang

**Report Highlights:**

Corn production MY07/08 is estimated to drop six percent from the
previous year due to an estimated nine percent drop in yield. In
MY08/09, government will continue to encourage grain production through
a series of policies, including direct payments, price supports, and a
machinery subsidy. Comparing with soaring meat and vegetable oil prices,
grains price rise has been moderate in MY07/08, however, to ease
inflationary pressure and guarantee domestic grain supply, the
government has tightened control on grain exports by removing tax
incentives on exports and reducing export quota in MY07/08. China will
remain a net exporter (though in small volume) for wheat, rice, and corn
in MY08/09.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[**Executive Summary 4**](#executive-summary)

[Grain Production, Consumption and Trade
5](#grain-production-consumption-and-trade)

[Grain Area and Yield 5](#grain-area-and-yield)

[Corn 5](#corn)

[Production 5](#production)

[Consumption 5](#consumption)

[Feed Consumption 6](#feed-consumption)

[Industrial Use 7](#industrial-use)

[Starch Production 7](#starch-production)

[Corn Trade 8](#corn-trade)

[Imports 8](#imports)

[Exports 8](#exports)

[Stocks 8](#stocks)

[DDGS 9](#ddgs)

[Regulatory Oversight 9](#regulatory-oversight)

[Market Opportunities 9](#market-opportunities)

[Wheat 10](#wheat)

[Production 10](#production-1)

[Consumption 10](#consumption-1)

[Trade 11](#trade)

[Stocks 11](#stocks-1)

[Rice 11](#rice)

[Production 11](#production-2)

[Consumption 12](#consumption-2)

[Trade 12](#trade-1)

[Stocks 12](#stocks-2)

[Barley 12](#barley)

[Sorghum 13](#sorghum)

[Ethanol 13](#ethanol)

[Fuel Ethanol 13](#fuel-ethanol)

[Ethanol Exports 14](#ethanol-exports)

[Policy 14](#policy)

[Grain Prices and Farmer Income 14](#grain-prices-and-farmer-income)

[Grain Support Programs 15](#grain-support-programs)

[Direct Payments for Grain Farmers
16](#direct-payments-for-grain-farmers)

[Seed Subsidy 16](#seed-subsidy)

[Price Support Programs 16](#price-support-programs)

[Subsidy on Farm Machinery 17](#subsidy-on-farm-machinery)

[Comprehensive Subsidy on Fuel and Fertilizer
17](#comprehensive-subsidy-on-fuel-and-fertilizer)

[Elimination of Agricultural Tax 17](#elimination-of-agricultural-tax)

[Tariff Rate Quotas 17](#tariff-rate-quotas)

[Statistical Tables 18](#statistical-tables)

[PSD tables 18](#psd-tables)

[Table1. Corn PSD Table 18](#table1.-corn-psd-table)

[Table2. Wheat PSD Table 19](#table2.-wheat-psd-table)

[Table3. Rice PSD Table 20](#table3.-rice-psd-table)

[Table4. Barley PSD Table 21](#table4.-barley-psd-table)

[Table5. Sorghum PSD Table 22](#table5.-sorghum-psd-table)

[Price Tables 23](#price-tables)

[Table6. Corn Price Table 23](#table6.-corn-price-table)

[Table7. Wheat Price Table 24](#table7.-wheat-price-table)

[Table8. Rice Price Table 25](#table8.-rice-price-table)

[Trade Tables 26](#trade-tables)

[Table9. Corn Trade Table 26](#table9.-corn-trade-table)

[Table10. Wheat Trade Table 30](#table10.-wheat-trade-table)

[Table11. Rice Trade Table 35](#table11.-rice-trade-table)

[Table12. Barley Trade Table 38](#table12.-barley-trade-table)

[Table13. Sorghum Trade Table 40](#table13.-sorghum-trade-table)

# Executive Summary

China\'s total grains acreage increased in MY07/08 over the previous
year as a result of strong market demand and a government support
program for grain farmers. China will continue to implement a state
policy of maintaining self-sufficiency in rice, wheat, and corn. In
MY08/09, government will continue to encourage grain production through
a series of policies, including direct payments, price supports, and a
machinery subsidy.

Corn production for MY07/08 is estimated to be 137 million metric tons
(MMT), down 6 percent from the previous year as a result of lower yield
due to unfavorable weather conditions in the major production region.
Corn production in MY08/09 is forecast at 143 MMT. As the Chinese
government tightens control on exports, corn exports are forecast to
drop to minimal levels in MY08/09. Forecast growth in the livestock
sector and expanded industrial use will further draw down corn stock
levels in MY08/09. However, China will not import any significant amount
of corn in MY08/09 due to the high international corn price. Wheat
production in MY07/08 is estimated to be 106 MMT, up slightly from the
previous year, and rice output for MY07/08 is estimated at 185 MMT, also
up slightly from the previous year. Due to four straight years of
expanded wheat and rice production, China is forecast to be a net
exporter (though in small volume) for rice and wheat in MY08/09.

![](media/image2.wmf){width="4.354166666666667in"
height="1.9965277777777777in"}The rising agricultural commodity prices
since 2007 have been the leading factor for the surge in overall
Consumer Price Index (CPI) in China. (Note: among all agricultural
commodities, grains witnessed the lowest price spike in MY07/08). To
ease the inflationary pressure, and guarantee domestic grains supply,
the government has tightened its control on grain exports by a series of
policies including the removal of tax incentives on exports and the
reduction of the export quota in MY07/08. Such policies will continue to
be in effect in MY08/09.

In order to fulfill a long term policy objective of self sufficiency in
grains and raising farmer's income, the government will continue to
expand support programs designated for the agricultural sector, and
especially in grain production at least for the next five years.

# 

# 

# 

# 

# 

# 

#  

# Grain Production, Consumption and Trade

## 

## Grain Area and Yield 

![](media/image3.wmf){width="4.9375in" height="2.59375in"}Since 2003
when China encountered a shortage in wheat and subsequently imported 10
MMT, the Chinese government has implemented a series of policies to
protect arable land usage and encourage grain (defined as cereals,
beans, and tubers) production. Under the 11^th^ (2006-2010) five year
plan, the objective is for annual sown area of grains to be at least 100
million hectares (Ha) and to increase average grain yield one percent
annually. China's Ministry of Agriculture (MOA) set a long-term target
that maintains grain sown area above 100 million Ha. In the past five
years, the sown area for rice, corn, and wheat averaged 80 percent of
the total sown area for grains.

(Note: The double cropped or intercropped acreages are included in the
sown area, for instance, early season rice and late season rice on one
plot are taken into account separately).

## Corn 

### Production

Despite a 4-percent increase in acreage, corn production for MY07/08 is
estimated at 137 MMT, down 6 percent from the previous year. The
persistent drought in the May-July period adversely impacted the corn
yield in northeastern China. Corn production in MY08/09 is forecast at
142 MMT, 5 MMT greater than the previous year. Assuming a normal weather
pattern, improvements in irrigation facilities and planting practices
such as tighter rows and higher quality seed varieties are expected to
contribute to a better than average yield in MY08/09. Corn area for
MY08/09 is forecast to increase slightly over the previous year as
farmers shift to corn in response to higher market prices.

Post does not accept official Chinese estimate of 148 MMT for MY07/08.
According to this estimate, this record production was the result of an
above average yield and increased acreage. However, based on Post's
field survey, the weather patterns in 2007 were not favorable for corn
growth, in particular during the pollination period. Excessively high
temperatures and dryness harmed the crop's development, thus affecting
the yield and quality of the grains. Actual field samples indicate the
average yield in northeastern China, the region accounting for 35
percent of national output, to be about 20 percent lower than the
previous year because of the drought.

### Consumption 

Corn is used in China as feed; for industrial production of sugar;
starch and biofuel; and, for food, accounting for 72, 20, and less than
one percent of domestic use, respectively. The remaining 7 percent is
either used as seed or is lost during distribution after harvest.

#### Feed Consumption

Post estimates feed corn consumption decreased one percent and will
increase by three percent respectively in MY07/08 and MY08/09. This is
closely linked to changes in meat, especially pork and poultry,
production and takes into account the increased efficiencies in feed
conversion.

![](media/image4.wmf){width="4.75in" height="2.875in"}Post estimates
that meat production efficiencies gained from better feed mixes have
reduced feed corn demand (per unit of meat output). According to an
annual survey on household and commercial farms by the National
Development and Reform Commission (NDRC), the overall usage of grains
and other crude protein ingredients in feed per unit of meat production
has been down an average of almost one percent per year over the past
ten years as a result of improved feed formulation and additives. Post
forecasts this trend will continue in the coming years.

In MY07/08, responding to these price increases for corn, some poultry
and swine farms in northern and central China substituted wheat and
early season rice into their feed mix, reducing the growth rate for feed
corn use. These practices are commonly found in wheat or rice production
provinces with an oversupply of lower-quality wheat and rice. As the
price gap for wheat and corn has narrowed significantly since MY07/08,
Post predicts the continuation of this trend. Higher portions of feed
wheat will be substituted for corn in MY08/09.

According to National Statistical Bureau (NSB), in CY2007 the meat
production was estimated to drop 3.5 percent from the previous year,
among them, pork production, dropped 9.2 percent, because of the
outbreaks of swine disease in major producing provinces in MY07/08.

In MY07/08, swine diseases and high prices for feed ingredients combined
to drive small household swine farms out of business. Industry sources
report that small sized farmers in the disease-hit regions have ceased
raising pigs in their backyards because the risk associated with rampant
animal disease outbreaks was beyond their control. In the previous
marketing years, household farms were estimated to contribute to about
75 percent of total swine production, and pork production is estimated
to account for 60 percent of China's total meat production.

There is no national tracking system for feed corn use. (MOA)'s China
Industry Feed Association tracks industrial feed, estimated up less than
2 percent in CY2007 to 111 MMT. Corn content is estimated between 55 and
65 percent of industrial compound feed. Industrial feed is estimated to
be between 50 and 65 percent of total feed use.

  ------------ ------------- -------------- ----------------- ------------------
  **China:                                                    
  Feed                                                        
  Production                                                  
  by Type                                                     
  (1,000                                                      
  tons)**                                                     

               **Total**     **Compound**   **Concentrate**   **Premix**

  2003         87,120        64,280         19,580            3,260

  2004         96,600        70,310         22,240            4,060

  2005         107,000       77,610         24,980            4,780

  2006         109,000       81,169         24,560            4,861

  2007         111,000       NA             NA                NA

  Source:                                                     
  China Feed                                                  
  Industry                                                    
  Office                                                      
  ------------ ------------- -------------- ----------------- ------------------

The price surge for animal products since mid-2007 has boosted profit
margin greatly for animal husbandry sector. Additionally, the government
enforced a favorable policy to promote swine production including a
subsidy on breeding stocks. However, due to the production cycle and
high input prices, Post estimates that the recovery of the swine sector
would be delayed until the third quarter in 2008. Mortality from blue
ear disease was also much higher than officially reported.

#### Industrial Use

Industrial use of corn includes the production of starch sweetener,
industrial and food starch and ethanol. Post estimates that corn
consumption for all industrial uses totaled 34 MMT in MY07/08, up by
about 2 MMT from the previous year. The growth rate in corn use in the
industrial sector in MY07/08 is estimated at 5 percent while in the
previous five years it averaged about 15 percent. In response to
mounting concerns over supply shortages of corn being the major cause
behind the inflation crisis, the government stopped approving new corn
processing plants in 2007 and 2008. Essentially, ethanol production
plants were the government's scapegoat to tighter domestic supplies and
higher world prices for corn.

China's starch and ethanol sectors are estimated to grow by 10 percent
in MY07/08 over the previous year (see separate section on Ethanol).
While corn is currently the principal ingredient for these sectors,
actual corn use depends on the relative costs of corn substitutes, which
include wheat, rice, sweet potatoes, and cassava.

China has included a tariff elimination on dry cassava chips in recent
free trade agreements with Thailand and other ASEAN countries. As a
result of this implementation, imports have exceeded 4 MMT in 2006 and
2007. Industry sources estimate this imported dry cassava chips used in
the starch and ethanol sectors were equivalent to more than 4 MMT of
corn in CY2007.

  ------------- --------------- --------------- --------------- --------------- --------------- --------------- -----------
  **China\'s                                                                                                    
  Cassava                                                                                                       
  (071410)                                                                                                      
  Imports from                                                                                                  
  the World by                                                                                                  
  Metric Ton                                                                                                    
  2002-2007**                                                                                                   

                2002            2003            2004            2005            2006             2007           %change

  **Total       **1,760,294**   **2,368,260**   **3,442,412**   **3,335,415**   **4,944,562**   **4,619,198**   **-6.58**
  Imports**                                                                                                     

  Thailand      1,425,371       1,874,362       2,734,389       2,695,576       3,864,203       3,202,647       -17.12

  Vietnam       212,878         453,132         522,296         411,573         935,401         1,273,240       36.12

  Indonesia     122,040         40,766          185,728         228,265         144,784         139,124         -3.91

  Laos                                                                          0               3,524           0

  Myanmar                                                                       0               650             0

  Malaysia                                                                      0               13              
  ------------- --------------- --------------- --------------- --------------- --------------- --------------- -----------

##### Starch Production 

The total corn used for starch manufacturing reached about 20 MMT in
MY0708, up 10 percent from the previous year. Approximately 50 percent
of corn starch production is used for sweetener and the rest is used in
the industrial and food processing sectors including papermaking,
textile production, and food-grade starch, including monosodium
glutamate (MSG). Cornstarch accounts for 85 percent of total Chinese
starch production.

### Corn Trade

Imports of corn are estimated at 100,000 tons in MY07/08. Post forecast
that no panamax or container ocean shipment will be commercially viable
for U.S corn exports to China. China's corn exports for MY07/08 are
estimated at 800,000 tons. Corn exports for MY08/09 are forecast at
500,000 tons as a result of a decline in stocks and the government's
tight control regime on grain exports.

#### Imports

Due to high ocean freight rates and tight world supplies, the current
landed price for imported U.S corn in Guangdong is calculated at
\$330/ton, which is 60 percent higher than the domestic corn price. Most
of China's corn imports, over land, come from border trade with its
Southeastern Asian neighboring countries. In MY08/09, Post forecasts
this trade pattern will not change. The increasingly high ocean freight
rate and strong U.S corn price is not likely to soften. The vast price
difference between U.S. and domestic corn will keep U.S. corn
uncompetitive in China.

#### Exports

Corn exports MY07/08 are estimated at 800,000 MT. Corn exports for
MY08/09 are forecast at 500,000 MT. Rising domestic corn demand for feed
and industrial use and the limited ability to expand production will
limit future exports. The majority of China's corn exports are destined
to South Korea, Japan and Southeast Asian countries.

The Chinese government manages corn exports. The NDRC, the State
Administration of Grain (SAG), the Ministry of Finance, and the
Agricultural Development Bank jointly determine the export quota based
on the annual supply and demand situation. To date, the government has
not issued an export quota for corn.

In December 2007 and early January 2008, the government did, however,
announce that it would remove the value added tax (VAT) rebate for grain
exports and levy provisional export taxes on grains and their flour
products to discourage grain exports. These policies are designed to
address concerns over rising domestic food prices and criticism that
food exports contribute to inflationary pressures (See GAIN Report
CH7093 and CH8001).

Post forecasts that under the current grain shortage supply situation
the Chinese government will not issue any significant amount of quota
for corn exports in CY2008. In the previous three years, the quota
ranged between four to six MMT annually. Corn exports prior to 2007 were
eligible for a 13 percent value added tax (VAT) rebate worth \$17 per
MT. The rebate is based on a base price fixed by NDRC rather than the
actual traded price. The actual export price has historically exceeded
the base price.

# 

### Stocks

While stock levels are considered a national secret by the Chinese
government, Post estimates ending stocks for MY07/08 to be 36.8 MMT and
forecasts ending stocks for MY08/09 to be 35.4 MMT, down by 1.7 MMT and
1.4 MMT, respectively, from the previous year as domestic consumption
outpaces production. Although the National Statistical Bureau (NSB)
surveyed stock levels of government entities, the survey data was not
made public and is, at best, incomplete.

Most corn stocks are held in the northern production provinces of
Heilongjiang, Jilin and Inner Mongolia. Central or provincial
governments pay the storage fees, estimated at an approximate annual
cost of \$13.3 (RMB 100) per ton. Because of the high cost of
transporting corn to users in the south, in the marketing years prior to
2007, these provinces lobbied the central government to provide export
supports (see GAIN report 7015) and transportation subsidies. Since the
end of 2007, all of these incentives on exports have been abolished.

### 

### DDGS

Domestic distillers dried grains with solubles (DDGS) production is an
outgrowth of China\'s ethanol production and is mostly consumed by swine
and dairy cattle or incorporated into animal feed production. Post
estimates China\'s production of corn-based DDGS at 2.5 MMT in MY07/08.
Though lower in protein content than protein meals, DDGS are a
substitute for soybean and other oilseed meal and are substituted when
it is the lower cost alternative. Except around corn ethanol plants,
most feed millers, livestock and poultry farms are not familiar with the
use of DDGS. There is no national standard labeling and packaging
practice for DDGS. The limited availability of DDGS and the variation in
quality (depending on the price and availability feedstock) make it
difficult for feed millers to incorporate it into their feed production.
As price differences vary between feedstocks including corn, wheat,
rice, cassava, and sorghum, the plants can make cost-effective
substitution accordingly.

#### Regulatory Oversight

While the domestic ethanol industry and feed mill sources report that
domestic production and sale of DDGS are basically unregulated, imports
must have a feed import registration and a biotech safety certificate.

The State Council\'s 2001 Management Regulation on Feed and Feed
Additive requires DDGS to be registered at MOA as a feed product. (See
GAIN CH6083 on Feed Registration.) After MOA first approved one import
registration for DDGS in May 2006, subsequent applications have been
made. The procedure is complicated as it requires a feeding test, and
may take more than half year to complete. Once complete, the
registration is valid for five years. As a feed ingredient, under a 2001
China Taxation Administration and Customs Administration rule, imported
DDGS is exempted from a 13-percent value added tax (VAT). (See GAIN
Report CH7015)

In addition, U.S. DDGS exporters must apply for a biotech import safety
certificate from MOA. The application procedure is the same as the one
required for the importation of biotech products, including soybeans and
corn. Exporters need to take a copy of the safety certificate, issued to
seed companies, to MOA\'s GMO Office and request an import safety
certificate. Post does not foresee any egregious obstacles with the MOA
certification process. (See GAIN CH5069.)

#### Market Opportunities

There are opportunities for U.S. DDGS exports to China because of the
higher quality of U.S. DDDS compared to the domestic product. However,
feed miller acceptance and competitive pricing is critical.

The U.S. DDGS production process has more consistent inputs meaning that
the U.S. product has higher protein levels than domestic DDGS. With the
exception of areas in north China near corn ethanol plants, feed millers
and industrial farm complexes are not familiar with this relatively new
product. Future marketing would require developing an understanding of
the nutritional value and use requirements.

The protein level for average Chinese DDGS is about 26 percent while the
U.S. DDGS protein (plus fat) is about 36 percent. In May 2007, one feed
miller in Guangdong successfully imported one trial shipment of U.S.
DDGS. Trade sources estimated that the calculated landed price for U.S
DDGS in Guangdong in February 2008 was about \$295/ton, while the
domestic DDGS price is about \$245/ton. However, according to industry
experts, the additional nutritional value gained from U.S. DDGS
outweighs the current price difference. This could be attested by the
strong demand for U.S. DDGS in other Asian countries including Taiwan
and South Korea, where feed millers are more familiar with and favor the
use of DDGS to substitute both corn and soy meal.

## 

## Wheat 

### Production 

Post estimates wheat production in MY07/08 is 106 MMT, up 1.5 percent
from the previous year. Good weather and MOA's production support
programs contributed to better than average yields and quality in
MY07/09. The acreage in MY07/08 is estimated to be 23.1 million Ha, up
slightly from the previous year.

The planted area in MY08/09 is forecast to be 23.1 million Ha, unchanged
from the previous year. Wheat production in MY08/09 is forecast at 105
MMT, 1 MMT down from the previous year. Winter wheat acreage accounted
for 93 percent of total wheat acreage in MY07/08. The planted winter
wheat for MY08/09 is estimated at 21.4 million Ha, unchanged from the
previous year. Wheat, like other grains, is considered lower risk,
stable, income crops when compared with vegetables, rapeseed, and
cotton. Winter wheat in the northern China plain is usually
double-cropped with corn. Compared with rice, corn and winter rapeseed,
wheat production uses a much higher rate of mechanized planting and
harvesting. Farmers in MY08/09 still favor wheat planting as it requires
less labor input and field management as compared with oilseed, rice,
rapeseed, and vegetables.

Major wheat production provinces include Henan, Shandong, Hebei, Anhui,
and Jiangsu provinces. Wheat production in these provinces is estimated
at 70 MMT in MY07/08, accounting for 67 percent of the national total.
Over the years, MOA has been trying to define and develop production
regions by encouraging the production of varieties with specific gluten
levels. However, the improvements in wheat quality have been slow.
Quality always varies due to differences in input applied and management
techniques at small-scale wheat farms in China. The arable land per
rural household in China is estimated at 1.4 acre in 2006, according to
National Statistical Bureau.

The heavy snow storm in southern China in early 2008 marginally impacted
the winter wheat in the region. MOA estimated that by February, affected
wheat acreage totaled 584,000 Ha, or less than 3 percent of the total
acreage. Agricultural officials estimate that the benefit brought by the
snow far outweighs the damages. The snow fall is expected to improve the
soil moisture and help reduce the likelihood for wheat diseases in
MY08/09.

### ![](media/image5.wmf){width="4.666666666666667in" height="3.25in"}Consumption

Overall wheat consumption has been declining gradually. As incomes rise,
consumers replace carbohydrates with protein. By some estimates, per
capita food-grain consumption declined by over 1 percent annually in
MY06/07 and MY07/08. According to the NSB, in home per capita
consumption of grain in rural households dropped to 206 kg in 2006 from
250 kg in 2000 and in home per capita annual consumption of grain by
urban households dropped to 76 kg in 2006 from 82 Kg in 2000, annually
down about 3 and 1 percent, respectively. Post estimates that this
decline will continue, as incomes rise in urban areas and consumers
increase their in-take of animal protein instead of carbohydrates.

As urban demand for traditional wheat products (Chinese steamed bread)
declines in favor of convenience foods, including instant noodles,
biscuits and bakery products, wheat quality is becoming more of a factor
for millers. Unlike traditional homemade or home-style Chinese food
products, flour for processed foods requires specialized gluten content
and consistent quality. Domestic flour millers usually try to satisfy
these requirements by blending imported wheat with lower-quality
domestic wheat.

Currently, the landed price for imported U.S. wheat is more than twice
the price of domestic wheat, which prevents the millers or traders from
purchasing directly from the international market. In MY07/08, flour
millers purchased imported wheat at auctions held by SinoGrain, a
central state-owned grain reserve corporation, or its provincial
counterparts. The imported wheat was purchased during 2002-2004 by the
central government. Even after three or four years, the quality is still
superior to that of domestic wheat.

### Trade 

Wheat imports for MY07/08 are estimated to drop down by 300,000 tons
from the previous marketing year to an estimated 50,000 tons as a result
of a good harvest in MY07/08 and an oversupply in the domestic market.
Wheat imports in MY08/09 are forecast at 30,000 tons, 20,000 tons lower
than the previous year.

Most of China's wheat and flour exports are destined to southeastern
Asian countries (mainly the Philippines). Because of production declines
in major wheat supplying countries, China's wheat exports and its flour
products have become increasingly price competitive in the international
market, even without the tax incentives such as VAT rebate. However,
China's wheat exports in MY07/08 are estimated at 2.3 MMT, unchanged
from the previous year because of the government controlled export
quota. Wheat exports for MY08/09 are forecast at 1 MMT, down by 57
percent from the previous year, due to the removal of the tax incentive
and a reduced export quota.

### Stocks 

While official stock level estimate are not available, Post estimates
that ending stocks for MY07/08 and MY08/09 will be 40.1 and 42.6 MMT,
respectively, up by 3 MMT and 2.5 MMT, respectively, from the previous
year as a result of four straight years of bumper harvests. Previously,
the NSB surveyed stock levels of government entities, but the survey
data was not made public.

## Rice 

### Production

Total rice production is estimated at 185 MMT (unmilled) in MY07/08, up
one percent from the previous year. Estimated area planted is 29.6
million Ha, up slightly from the previous year. Early-season rice
production is estimated at 32 MMT, unchanged from the previous year.
Because of favorable weather for Japonica varieties and late season
rice, yield and quality are estimated to be above the five-year average.

Rice production for MY08/09 is forecast at 184 MMT, down slightly from
the previous year, assuming an average yield. Acreage is forecast to be
unchanged from the previous year. The government\'s price support
program (see Policy section) has guaranteed reasonable returns for rice
farmers.

### Consumption

MY07/08 consumption is estimated at 127 MMT (milled), down slightly over
the previous year. Indica rice varieties have been a predominant staple
food for the population in southern China, while Japonica rice varieties
are traditionally popular in northern China where people also favor
wheat flour based staple foods. As discussed in the wheat section,
surveys show per capita in house grain consumption (including rice and
wheat) is declining by over 1 percent annually and this trend is
projected to continue.

In addition to food use, low quality early rice varieties and stale rice
reserves are used to feed swine and poultry at both commercial farms and
rural households. In MY07/08, because of a higher corn prices, Post
estimates an increased use of rice and wheat for feed. In the ethanol
sector, low priced indica rice has replaced some corn feedstock in
MY07/08. While there is no reliable data on the feed use of rice, Post
estimates that approximately 10 MMT of rice (unmilled) is used annually
for feed.

### Trade 

As of 2007, China signed import quarantine protocols for rice with
Thailand, Uruguay, Vietnam, Pakistan, and Japan. Most import varieties
were Indica of which Thailand and Vietnam were the principal suppliers
in CY2007.

Rice imports for MY07/08 are estimated at 300,000 tons. Rice imports for
MY08/09 are forecast at 330,000 tons, up 10 percent from the previous
year. Most of the rice imports are Thai fragrant rice, which are
consumed in affluent coastal cities.

Rice exports in MY07/08 are estimated at 1 MMT. Rice exports in MY08/09
are forecast at 1.2 MMT. Most of China's rice exports are low quality
Indica exported to African countries. China also exports Japonica
varieties to Japan, Russia and South Korea. These exports are small in
volume but highly profitable, and are forecast to continue.

### Stocks

While official stock level data is not available, Post estimates that
ending stocks for MY07/08 are 37.7 MMT, and are forecast to reach 38.6
in MY08/09. Previously, NSB surveyed the stock levels of government
entities, but survey data was not made public and is, at best,
incomplete.

## Barley

MY07/08 barley area is estimated at 950,000 Ha, up four percent over the
previous year principally as a result of increased demand from the
brewery sector and a short supply in the international market.
Production is estimated at 3.6 MMT, unchanged from the previous year.
Post forecasts that both barley area and production in MY08/09 will
increase slightly over the previous year, as a result of increased
demand for malting barley.

Gansu Province is the largest and highest quality barley producer in
China and Post estimates its barley production at 800,000 MT, accounting
for 22 percent of total production.

![](media/image6.wmf){width="3.8333333333333335in"
height="1.9902777777777778in"}

Barley in China is mostly used for brewing. Domestic barley production
is inadequate to supply the expanding brewery industry. Industry sources
estimate that China's beer production in 2007 will exceed 37 million
kilolitres, up over 5 percent compared to 2006. The sector's total
demand for malting barley is estimated at around 4 MMT annually.
However, as a result of a poor crop in Australia and Canada, China's
MY07/08 imported barley is estimated at 800,000 MT, down 30 percent from
the previous year. Barley imports in MY08/09 are forecast up slightly as
the global supply rebounds. If international stocks remain short and
prices remain high, however, feed barley or other grains could be
substituted, despite the potential impact on beer quality.

Currently, neither MOA nor provincial authorities consider barley as an
important feed grain, nor is it a crop with production assistance.

## Sorghum

Post estimates the sorghum planted area is unchanged from the previous
year at 550,000 Ha. Production is up almost 25 percent in MY07/08 to 2.6
MMT due to higher yields. The MY08/09 sorghum planted area and
production is forecast to fall by 10 percent and 7 percent,
respectively. The forecast reduction in acreage reflects farmers
intention to turn to more profitable corn in northeastern China. Sorghum
is mostly planted on marginal land with no irrigation.

![](media/image7.wmf){width="3.8125in" height="2.18125in"}While some
sorghum is used for

feed, the majority, approximately 2 MMT, is used for hard liquor
(ethanol-based) production. Production of hard liquor is estimated at
4.1 MMT for MY06/07, up 23 percent from the previous year. Hard liquor
consumption is forecast to rise as consumer incomes rise and effective
marketing campaigns by distillers promote the gift-giving of traditional
Chinese alcohol. Promotions include significant prime time TV and other
media advertisements in recent years.

Currently, neither MOA nor provincial authorities consider sorghum as an
important feed grain, nor is it a crop with production assistance.

## Ethanol

Total ethanol production in MY07/08 is estimated at 8 MMT. About 50
percent of total ethanol production is based on grains (mostly corn, but
also includes sorghum, wheat and rice) with the remainder based on
tubers, including cassava and sweet potatoes. Corn based ethanol
production is estimated at 2.8 MMT in MY07/08, including approximately
1.2 MMT of fuel ethanol.

### Fuel Ethanol 

The government strictly manages the fuel ethanol sector. Currently, only
five licensed plants can market their products as fuel ethanol. Fuel
ethanol must be sold to one of two state-owned oil companies.

Estimated fuel ethanol production in MY07/08 is 1.5 MMT, with
approximately 1 MMT based on corn as an input. According to government
guidance, fuel ethanol production in China is set to expand to 3.5 MMT
by 2010, but corn will not be a significant part of this expansion.
Future plants will mostly be based in the south or west and use either
sweet sorghum, tubors, or cassava. (See GAIN Report CH7039)

Total grain consumption in MY06/07 by the fuel ethanol sector is
estimated at about 4.5 MMT, of which about 3 MMT is corn. Both central
and provincial governments have invested heavily to support the fuel
ethanol sector. State media reports that the government offered
\$225/ton (RMB 1,800/ton) as a subsidy for corn-based ethanol in 2005.
In 2006, the government reduced the subsidy by an average of \$37.5/ton
(RMB300/ton) for the four plants signaling the government's intention to
curb the expansion of grain based ethanol production. In 2008, the
government will continue to cut the subsidy level to encourage the
improvements in efficiency at these ethanol plants.

### Ethanol Exports

Rising international fuel prices in 2006 propelled a leap in China's
ethanol exports, which rose over 500 percent from the previous year.
Chinese government concerns that the development of export oriented
ethanol plants might lead to domestic grain shortages led to the
elimination of the 13-percent VAT rebate on ethanol exports, effective
January 2007. The elimination of the VAT rebate led to an 87-percent
drop in ethanol exports in 2007. In 2008, as a measure to ease
inflationary pressure, the government continues to limit ethanol
exports.

  ----------- ---------------------- --------- --------- -------- --------- ---------
  **China                                                                   
  Ethanol                                                                   
  Exports in                                                                
  2004-2007                                                                 
  (in 1,000                                                                 
  MT)**                                                                     

                                     2005      2006      \%       2007      %change
                                                         Change             

   Group      Ethanol                137,873   865,112   5277%    110,477   -87%

   220710     ETHYL ALCOHOL,         134,856   825,113   512%     94,110    -89%
              UNDENAT,                                                      

   220720     ETHYL ALCOHOL & OTH    3,018     39,999    12%      16,367    -59%
              SPIRITS DENATURED ANY                                         
              STRENGTH                                                      

  Source of                                                                 
  data: China                                                               
  Customs                                                                   
  ----------- ---------------------- --------- --------- -------- --------- ---------

# Policy

China retains its long-term self-sufficiency objective for food grains,
and defines food grains to include rice, wheat, and corn. In 2001,
concurrent with China\'s accession to the World Trade Organization
(WTO), China adopted policies on grain production and trade, including
seed subsidies and tariff rate quotas. In 2003, due to shortage in the
national wheat supply, China imported 10 MMT of wheat. In response,
China implemented a series of policies, effective 2004, including the
elimination of taxes on agricultural land, direct payments to grain
farmers, adjustments to price support programs, and in 2005, a subsidy
for the purchase of farm machinery. In 2006, in addition to the existing
VAT exemption for farm use of seed and fertilizers, China added a direct
subsidy for farm use of fuel and fertilizers.

Since 2004, the No. 1 Decree of the central government has been in
support of the rural community and to improve farm income. This was
incorporated by the National People\'s Congress in the 11^th^ five-year
plan (2006-2010) which includes the specific objective of increasing
farm income. MOA has included maintaining the annual sown area of grains
above 100 million Ha and increasing average annual grain yield to one
percent as a component to meeting this objective.

The rising trend of agricultural commodity prices since 2007 has been
the leading factor for the surge in overall Consumer Price Index (CPI)
in China. To ease the inflationary pressure, the government will
continue to expand support programs for the agricultural sector
including grain production at least in the next five years.

## Grain Prices and Farmer Income 

![](media/image8.wmf){width="5.510416666666667in"
height="2.970833333333333in"}Average prices have been up for corn and
wheat in MY07/08, 18 and 9 percent, respectively, over the previous
year. The average rice price has been slightly lower than the previous
year. Boosted by government procurement at harvest by floor price in
MY07/08, the current market price range for wheat and rice are above the
floor prices and mostly driven by government auctions of grains
purchased in MY07/08 and previous years. (See Price Support Program).

While lower than their urban counterparts, in 2007, net per capita rural
income rose by 10 percent to \$552 (RMB 4,140), according to state media
source, the highest growth rate since 1997. For grain farmers, Post
estimates that the average net profit/Ha (wheat, corn and rice) in 2007
will be higher than 2006 due to rising grain prices. See table below.

  ---------------- -------- ------ ------ ------ ------ ------ ------ ------ ------
  **Net Profit for                                                           
  Grain Farmers                                                              
  (in US \$/Ha) in                                                           
  1998-2006**                                                                

  Year             1998     1999   2000   2001   2002   2003   2004   2005   2006

  Net Profit/Ha    144      46     -6     71     9      62     393    245    310

  Source: National                                                           
  Development &                                                              
  Reform                                                                     
  Commission                                                                 
  ---------------- -------- ------ ------ ------ ------ ------ ------ ------ ------

## Grain Support Programs 

China's rice, wheat, and corn self-sufficiency objective is implemented
using direct payments, seed subsidies, tariff rate quotas (discussed
separately), price support programs (in the case of rice and wheat),
subsidies for farm machinery, and subsidies for farm use of fuel and
fertilizers. In MY07/08, these policies have produced a slight
oversupply of rice and wheat, allowing for some exports, which will
continue in MY08/09. Corn production has mostly been mostly driven by
the growing domestic demand for corn from livestock and industrial
users. This demand is estimated to outstrip supplies in MY07/08, drawing
down stocks and possibly allowing for imports, and is forecast to do the
same in MY08/09.

The direct grain subsidy (payment to the grain farmer), seed subsidy,
farm machinery subsidy, and comprehensive subsidy totaled \$6.84 billion
(RMB 51.27 billion) in 2007, up 63 percent from the previous year,
according to the state media. In 2008, government spending on the
agricultural sector is expected to be higher than the previous year. The
budget will be approved and announced after National People's Congress
in March. A separate report by the Ministry of Finance stated that the
direct cash payment to grain farmers would average about \$82/ha (RMB
615/ha) in 2008, a rise of 75 percent from the previous year.

### 

### Direct Payments for Grain Farmers

In 2004, the central government offered a program of direct payments to
grain growers, implemented at the discretion of the provinces.
Implementation varies by province with some providing the subsidy based
on planted area and others based on quantity produced. The average
program payment is \$18/ha, slightly less than \$9 per average farm
household in 2005. In 2006 and 2007, the payment averaged about \$10 per
farm household.

### Seed Subsidy 

In 2001, MOA implemented the seed subsidy program for wheat and has
subsequently expanded it to corn, rice, and soybeans. The combined value
of the seed subsidy for wheat, rice, corn, and soybean was \$521 million
(RMB 4.07 billion) in 2006, up 5 percent from 2005. The program is
intended to expand production through improved seed quality. Funding is
principally provided through MOA and implementation is at the provincial
level. In 2007, the funding for wheat, rice, and corn was unchanged from
the previous year.

Implementation varies by commodity and province but basically falls into
two categories: direct payments or discounted seeds. As a direct
payment, it is an income support mechanism where the farmer is provided
between \$19-23/Ha (RMB 10-15/mu) to purchase seeds, but what the farmer
actually does with the payment is not monitored.

Alternatively, the subsidy is provided for farmers to purchase high
quality seeds at commodity prices. The subsidy is approximately \$19/Ha
(RMB 10/mu) and may take the form of a payment to the seed company to
provide a specific type of seed at commodity prices, or a reimbursement
to the farmer for seeds purchased. In Henan, the government first
identifies the preferred wheat varieties and then seed companies are
asked to offer discount prices. After the sale, the seed company
receives a subsidy of approximately 13.3 cent/kg (RMB 1/kg) of wheat
seed. (Seed wheat usage averages 10 kg/mu (150 Kg/Ha) in Henan
Province.)

### Price Support Programs

In 2007, the central government continued its price support program for
major producers of rice and wheat. Provinces covered by a floor price
program were Jilin, Heilongjiang, Anhui, Jiangxi, Hubei, Hunan, and
Sichuan. Provinces covered by a wheat price floor were Hebei, Jiangsu,
Anhui, Shandong, Henan, and Hubei.

The floor price is set every year by NDRC in collaboration with the
Ministry of Finance, the State Administration for Grains (SAG), the
China Agricultural Development Bank (CADB), and MOA. Implementation is
by SAG and the quasi-governmental SinoGrain Corporation, and funded by
loans from CADB. Loans are recovered by commodity sales later in the
marketing year or in subsequent marketing years. In February 2008, NDRC
announced that the floor price for wheat and rice will increase by less
than 1 percent in 2008 from the previous year.

In 2006-2007, the government purchased about 70 MMT of wheat from grain
farmers when the market price fell below the prefixed floor price.
During the marketing year, the government holds regular auctions at
provincial wholesale markets to sell off the wheat. According to
industry sources, by end of 2007, about 40 MMT of wheat was sold.

### Subsidy on Farm Machinery

In 2007, the central government provided \$267 million (RMB 2 billion)
for the purchase of farm machinery, up 230 percent, and the program
covered two thirds of agricultural counties nationwide. Complementing
central government funds, the provincial governments provided \$173
million (RMB 1.3 billion) in 2007, up 14 percent from the previous year.
.

The program offsets the cost of purchases by reimbursing the farmer or
compensating the seller for 20 to 30 percent of the purchase price. The
program is implemented at the provincial level and local governments
decide on machines and models eligible for the subsidy. The subsidy
supported the mechanization of wheat harvesting and rice planting. In
2007, the government started trials on mechanized corn harvesting.

# 

### Comprehensive Subsidy on Fuel and Fertilizer

In 2007, the comprehensive subsidy on fuel and fertilizer for grain
farmers totaled \$ 3.6 billion (RMB 27.6 billion), up 120 percent from
the previous year. The program, started in 2006, intends to partially
compensate farmers for price increases in fuel, fertilizer and other
agricultural inputs. According to the Ministry of Finance, the
comprehensive subsidy averaged about \$14.5 per farm household in 2007.

## Elimination of Agricultural Tax

Since 2004, the government began reducing agricultural taxes on farmland
(simultaneously introducing direct payments). Prior to 2004, there had
been a decade-old 7 percent tax on agricultural production. In 2006, the
government announced that all provinces had eliminated the agricultural
tax.

## Tariff Rate Quotas

Upon membership to the World Trade Organization (WTO), China established
Tariff Rate Quotas (TRQ) for wheat, rice, corn, and several other
commodities. These quotas were phased in and reached final levels in
2004. The percentage of the quota reserved for non-state-owned
enterprises is 10, 40 and 50 percent for wheat, corn, rice (short and
long grain), respectively.

# 

# 

# Statistical Tables

## 

## PSD tables

### 

### Table1. Corn PSD Table

  -------------- ---------- ---------- ----------- ---------- ---------- ------------ ---------- ---------- -----------
  **China,                                                                                                  
  Peoples                                                                                                   
  Republic of**                                                                                             

  **Corn**                                                               (1000                              
                                                                         HA)(1000                           
                                                                         MT)(MT/HA)                         

                 2006       Revised                2007       Estimate                2008       Forecast   

                 USDA\      Post\      Post\       USDA\      Post\      Post\        USDA\      Post\      Post\
                 Official   Estimate   Estimate\   Official   Estimate   Estimate\    Official   Estimate   Estimate\
                                       New                               New                                New

  **Market Year             10-2006    10-2006                10-2007    10-2007                 10-2008    10-2008
  Begin**                                                                                                   

  Area Harvested 26970      27000      26970       28000      27200      28000        0          0          28200

  Beginning      35255      33890      35255       32482      29490      38482        28582      22290      36782
  Stocks                                                                                                    

  Production     145480     142000     145480      145000     143000     137000       0          0          142000

  MY Imports     16         100        16          100        800        100          0          0          150

  TY Imports     16         100        16          100        800        100          0          0          150

  TY Imp. from   49         0          49          0          0          5            0          0          0
  U.S.                                                                                                      

  Total Supply   180751     175990     180751      177582     173290     175582       28582      22290      178932

  MY Exports     5269       4000       5269        1000       1000       800          0          0          500

  TY Exports     5269       4000       5269        1000       1000       800          0          0          500

  Feed           103000     102500     97000       105000     106000     96000        0          0          99000
  Consumption                                                                                               

  FSI            40000      40000      40000       43000      44000      42000        0          0          44000
  Consumption                                                                                               

  Total          143000     142500     137000      148000     150000     138000       0          0          143000
  Consumption                                                                                               

  Ending Stocks  32482      29490      38482       28582      22290      36782        0          0          35432

  Total          180751     175990     180751      177582     173290     175582       0          0          178932
  Distribution                                                                                              
  -------------- ---------- ---------- ----------- ---------- ---------- ------------ ---------- ---------- -----------

### Table2. Wheat PSD Table

  -------------- -- ---------- ---------- ----------- ---------- ---------- ----------- ------------ ---------- --------- ---------- -----------
  **China,                                                                                                                           
  Peoples                                                                                                                            
  Republic of**                                                                                                                      

  **Wheat**                                                                             (1000                                        
                                                                                        HA)(1000                                     
                                                                                        MT)(MT/HA)                                   

                    2006       Revised                2007       Estimate                            2008                 Forecast   

                    USDA\      Post\      Post\       USDA\      Post\      Post\                    USDA\                Post\      Post\
                    Official   Estimate   Estimate\   Official   Estimate   Estimate\                Official             Estimate   Estimate\
                                          New                               New                                                      New

  **Market Year                07-2006    07-2006                07-2007    07-2007                             07-2008              07-2008
  Begin**                                                                                                                            

  Area Harvested    22960      23300      22960       23100      23200      23100                    0                    0          23100

  Beginning         34890      34890      34890       35957      35390      37382                    39107                35790      40132
  Stocks                                                                                                                             

  Production        104470     103000     104470      106000     101000     106000                   0                    0          105000

  MY Imports        380        500        374         150        400        50                       0                    0          30

  TY Imports        380        500        374         150        400        50                       0                    0          30

  TY Imp. from      64         150        66          0          100        15                       0                    0          10
  U.S.                                                                                                                               

  Total Supply      139740     138390     139734      142107     136790     143432                   39107                35790      145162

  MY Exports        2783       2000       2352        2500       1500       2300                     0                    0          1000

  TY Exports        2783       2000       2352        2500       1500       2300                     0                    0          1000

  Feed              4000       4500       4000        4000       4000       6000                     0                    0          7000
  Consumption                                                                                                                        

  FSI               97000      96500      96000       96500      95500      95000                    0                    0          94500
  Consumption                                                                                                                        

  Total             101000     101000     100000      100500     99500      101000                   0                    0          101500
  Consumption                                                                                                                        

  Ending Stocks     35957      35390      37382       39107      35790      40132                    0                    0          42662

  Total             139740     138390     139734      142107     136790     143432                   0                    0          145162
  Distribution                                                                                                                       
  -------------- -- ---------- ---------- ----------- ---------- ---------- ----------- ------------ ---------- --------- ---------- -----------

### Table3. Rice PSD Table 

  -------------- ---------- ---------- ----------- ---------- ---------- ------------ ---------- ---------- -----------
  **China,                                                                                                  
  Peoples                                                                                                   
  Republic of**                                                                                             

  **Rice,                                                                (1000                              
  Milled**                                                               HA)(1000                           
                                                                         MT)(MT/HA)                         

                 2006       Revised                2007       Estimate                2008       Forecast   

                 USDA\      Post\      Post\       USDA\      Post\      Post\        USDA\      Post\      Post\
                 Official   Estimate   Estimate\   Official   Estimate   Estimate\    Official   Estimate   Estimate\
                                       New                               New                                New

  **Market Year             01-2007    01-2007                01-2008    01-2008                 01-2009    01-2009
  Begin**                                                                                                   

  Area Harvested 29295      29200      29295       29600      29400      29600        0          0          29500

  Beginning      36783      36327      36783       35968      35027      35915        35668      35327      37715
  Stocks                                                                                                    

  Milled         127800     127000     127800      129500     128000     129500       0          0          128500
  Production                                                                                                

  Rough          182571     181429     182571      185000     182857     185000       0          0          183571
  Production                                                                                                

  Milling Rate   7000       7000       7000        7000       7000       7000         0          0          7000
  (.9999)                                                                                                   

  MY Imports     500        900        472         600        900        300          0          0          330

  TY Imports     500        900        472         600        900        300          0          0          330

  TY Imp. from   0          0          0           0          0          0            0          0          0
  U.S.                                                                                                      

  Total Supply   165083     164227     165055      166068     163927     165715       35668      35327      166545

  MY Exports     1315       1400       1340        1300       1500       1000         0          0          1200

  TY Exports     1315       1400       1340        1300       1500       1000         0          0          1200

  Total          127800     127800     127800      129100     127100     127000       0          0          126500
  Consumption                                                                                               

  Ending Stocks  35968      35027      35915       35668      35327      37715        0          0          38845

  Total          165083     164227     165055      166068     163927     165715       0          0          166545
  Distribution                                                                                              
  -------------- ---------- ---------- ----------- ---------- ---------- ------------ ---------- ---------- -----------

### Table4. Barley PSD Table

### 

  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ------------ ---------- -----------
  **China,                                                                                                   
  Peoples                                                                                                    
  Republic of**                                                                                              

  **Barley**                                                                         (1000                   
                                                                                     HA)(1000                
                                                                                     MT)(MT/HA)              

                 2006       Revised                2007       Estimate               2008         Forecast   

                 USDA\      Post\      Post\       USDA\      Post\      Post\       USDA\        Post\      Post\
                 Official   Estimate   Estimate\   Official   Estimate   Estimate\   Official     Estimate   Estimate\
                                       New                               New                                 New

  **Market Year             10-2006    10-2006                10-2007    10-2007                  10-2008    10-2008
  Begin**                                                                                                    

  Area Harvested 880        880        915         860        860        950         0            0          980

  Beginning      261        361        261         88         401        304         78           341        204
  Stocks                                                                                                     

  Production     3500       3500       3565        3400       3400       3600        0            0          3700

  MY Imports     1127       2000       1127        1300       2100       800         0            0          1000

  TY Imports     1127       2000       1127        1300       2100       800         0            0          1000

  TY Imp. from   0          0          0           0          0          0           0            0          0
  U.S.                                                                                                       

  Total Supply   4888       5861       4953        4788       5901       4704        78           341        4904

  MY Exports     0          10         49          10         10         200         0            0          150

  TY Exports     0          10         49          10         10         200         0            0          150

  Feed           1000       1200       800         1000       1100       800         0            0          800
  Consumption                                                                                                

  FSI            3800       4250       3800        3700       4450       3500        0            0          3700
  Consumption                                                                                                

  Total          4800       5450       4600        4700       5550       4300        0            0          4500
  Consumption                                                                                                

  Ending Stocks  88         401        304         78         341        204         0            0          254

  Total          4888       5861       4953        4788       5901       4704        0            0          4904
  Distribution                                                                                               
  -------------- ---------- ---------- ----------- ---------- ---------- ----------- ------------ ---------- -----------

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

### 

###  

### Table5. Sorghum PSD Table 

  -------------- ---------- ---------- ----------- ----- ---------- ---------- ----------- ------------ ---------- ---------- -----------
  **China,                                                                                                                    
  Peoples                                                                                                                     
  Republic of**                                                                                                               

  **Sorghum**                                                                              (1000                              
                                                                                           HA)(1000                           
                                                                                           MT)(MT/HA)                         

                 2006       Revised                      2007       Estimate                            2008       Forecast   

                 USDA\      Post\      Post\             USDA\      Post\      Post\                    USDA\      Post\      Post\
                 Official   Estimate   Estimate\         Official   Estimate   Estimate\                Official   Estimate   Estimate\
                                       New                                     New                                            New

  **Market Year             10-2006    10-2006                      10-2007    10-2007                             10-2008    10-2008
  Begin**                                                                                                                     

  Area Harvested 590        590        566               600        600        550                      0          0          500

  Beginning      185        185        185               155        225        103                      110        182        128
  Stocks                                                                                                                      

  Production     2700       2800       2098              2600       2850       2600                     0          0          2400

  MY Imports     4          10         4                 10         12         5                        0          0          5

  TY Imports     4          10         4                 10         12         5                        0          0          5

  TY Imp. from   0          0          0                 0          0          0                        0          0          0
  U.S.                                                                                                                        

  Total Supply   2889       2995       2287              2765       3087       2708                     110        182        2533

  MY Exports     144        30         144               25         25         180                      0          0          150

  TY Exports     144        30         144               25         25         180                      0          0          150

  Feed           320        470        140               290        540        300                      0          0          200
  Consumption                                                                                                                 

  FSI            2270       2270       1900              2340       2340       2100                     0          0          2000
  Consumption                                                                                                                 

  Total          2590       2740       2040              2630       2880       2400                     0          0          2200
  Consumption                                                                                                                 

  Ending Stocks  155        225        103               110        182        128                      0          0          183

  Total          2889       2995       2287              2765       3087       2708                     0          0          2533
  Distribution                                                                                                                
  -------------- ---------- ---------- ----------- ----- ---------- ---------- ----------- ------------ ---------- ---------- -----------

## Price Tables

### Table6. Corn Price Table

  ---------------------- ---------------------- -------------------------
  **China\'s Average                            
  Corn Wholesale                                
  Prices  **                                    

  (Renminbi Per Metric                          
  Ton, USD 1.00 = RMB                           
  7.5)                                          

                         Producing Region/1     Consuming Region/2

  January (2006)         1130                   1340

  February               1160                   1380

  March                  1180                   1390

  April                  1170                   1370

  May                    1200                   1419

  June                   1250                   1510

  July                   1240                   1490

  August                 1240                   1490

  September              1250                   1500

  October                1250                   1400

  November               1260                   1440

  December               1380                   1680

  January (2007)         1400                   1680

  February               1380                   1680

  March                  1370                   1670

  April                  1360                   1680

  May                    1440                   1640

  June                   1480                   1680

  July                   1430                   1670

  August                 1410                   1660

  September              1430                   1800

  October                1430                   1720

  November               1510                   1850

  December               1520                   1870

  /1 Jilin Province/2                           
  Guangdong Province                            

  Source: China National                        
  Grain and Oils                                
  Information Center                            
  ---------------------- ---------------------- -------------------------

### Table7. Wheat Price Table

+----------------------+---------------------+------------------------+
| **China Average      |                     |                        |
| Wheat(Grade2)        |                     |                        |
| Wholesale Price**    |                     |                        |
+----------------------+---------------------+------------------------+
| (Renminbi Per Metric |                     |                        |
| Ton, USD 1.00 = RMB  |                     |                        |
| 7.5)                 |                     |                        |
+----------------------+---------------------+------------------------+
|                      | Henan Province      | Jiangsu Province       |
+----------------------+---------------------+------------------------+
| January(2006)        | 1,426               | 1,366                  |
+----------------------+---------------------+------------------------+
| February             | 1,411               | 1,369                  |
+----------------------+---------------------+------------------------+
| March                | 1,381               | 1,370                  |
+----------------------+---------------------+------------------------+
| April                | 1,380               | 1,382                  |
+----------------------+---------------------+------------------------+
| May                  | 1,394               | 1,433                  |
+----------------------+---------------------+------------------------+
| June                 | 1,409               | 1,401                  |
+----------------------+---------------------+------------------------+
| July                 | 1,401               | 1,336                  |
+----------------------+---------------------+------------------------+
| August               | 1,382               | 1,304                  |
+----------------------+---------------------+------------------------+
| September            | 1,440               | 1,351                  |
+----------------------+---------------------+------------------------+
| October              | 1,470               | 1,384                  |
+----------------------+---------------------+------------------------+
| November             | 1,520               | 1,501                  |
+----------------------+---------------------+------------------------+
| December             | 1,569               | 1,544                  |
+----------------------+---------------------+------------------------+
| January (2007)       | 1,557               | 1,530                  |
+----------------------+---------------------+------------------------+
| February             | 1,531               | 1,530                  |
+----------------------+---------------------+------------------------+
| March                | 1,535               | 1,550                  |
+----------------------+---------------------+------------------------+
| April                | 1,525               | 1,530                  |
+----------------------+---------------------+------------------------+
| May                  | 1,520               | 1,520                  |
+----------------------+---------------------+------------------------+
| June                 | 1,485               | 1,490                  |
+----------------------+---------------------+------------------------+
| July                 | 1,495               | 1,430                  |
+----------------------+---------------------+------------------------+
| August               | 1,550               | 1,520                  |
+----------------------+---------------------+------------------------+
| September            | 1,550               | 1,540                  |
+----------------------+---------------------+------------------------+
| October              | 1,580               | 1,580                  |
+----------------------+---------------------+------------------------+
| November             | 1,580               | 1,620                  |
+----------------------+---------------------+------------------------+
| December             | 1,575               | 1,610                  |
+----------------------+---------------------+------------------------+
| Source: China        |                     |                        |
| National Grain and   |                     |                        |
| Oils Information     |                     |                        |
| Center               |                     |                        |
|                      |                     |                        |
|                      |                     |                        |
+----------------------+---------------------+------------------------+

### 

### Table8. Rice Price Table

  ---------------------- ---------------------------- --------------------
  **China\'s Average                                  
  Wholesale Japonica                                  
  Rice Price**                                        

  (Renminbi Per Metric                                
  Ton, USD 1.00 = RMB                                 
  7.5)                                                

                         Jiangsu Province             Heilongjiang
                                                      Province

  January (2006)         1,880                        1,793

  February               1,880                        1,806

  March                  1,859                        1,795

  April                  1,828                        1,780

  May                    1,814                        1,809

  June                   1,764                        1,866

  July                   1,747                        1,870

  August                 1,770                        1,885

  September              1,746                        1,897

  October                1,676                        1,838

  November               1,699                        1,793

  December               1,780                        1,722

  January (2007)         1,782                        1,676

  February               1,795                        1,633

  March                  1,812                        1,635

  April                  1,763                        1,661

  May                    1,750                        1,689

  June                   1,794                        1,710

  July                   1,855                        1,700

  August                 1,929                        1,673

  September              1,935                        1,658

  October                1,903                        1,629

  November               1,855                        1,567

  December               1,892                        1,626

  **Source: China                                     
  National Grain and                                  
  Oils Information                                    
  Center **                                           
  ---------------------- ---------------------------- --------------------

## Trade Tables

### Table9. Corn Trade Table

  -------------------------- --------- ----------- ----------- ---------- -----------
  **China Corn Exports by                                                 
  Destination, MY 2006/2007                                               
  (Metric Tons)**                                                         

  Country                    Oct-Dec   Jan-Mar     April-Jun   Jun-Sept   Total

  \--World\-- -              804,457   2,834,974   766,993     863,163    5,269,587

  Korea, South -             417,263   1,766,120   557,672     608,479    3,349,533

  Japan -                    177,345   387,577     91,857      164,350    821,129

  Korea, North -             7,790     3,260       6,265       14,804     32,119

  Malaysia -                 147,511   289,075     111,167     56,797     604,550

  Canada -                   0         0           0           18,672     18,672

  Switzerland -              0         0           0           0          0

  Sweden -                   0         0           0           0          0

  Bangladesh -               0         0           0           40         40

  Myanmar -                  0         0           12          0          12

  Cambodia -                 0         0           0           0          0

  Others                     54,548    388,942     20          21         443,531

  Source: China Customs                                                    

  HS                                                                      
  Codes:10051000,10059000                                                 
  -------------------------- --------- ----------- ----------- ---------- -----------

  --------------------------- --------- ---------- ----------- ---------- ---------
  **China Corn Exports by                                                 
  Destination, MY 2007/2008                                               
  (Metric Tons)**                                                         

  Country                     Oct-Dec   Jan-Mar    April-Jun   Jun-Sept   Total

  \--World\-- -               382,623                                     382,623

  Korea, South -              251,808                                     251,808

  Japan -                     68,633                                      68,633

  Korea, North -              29,359                                      29,359

  Malaysia -                  24,999                                      24,999

  Canada -                    4,284                                       4,284

  Switzerland -               2,786                                       2,786

  Sweden -                    600                                         600

  Bangladesh -                80                                          80

  Myanmar -                   76                                          76

  Cambodia -                  0                                           0

  Others                      0                                           0

  Source: China Customs                                                    

  HS                                                                      
  Codes:10051000,10059000                                                 
  --------------------------- --------- ---------- ----------- ---------- ---------

  -------------------------- --------- --------- ----------- ---------- -----------
  **China Corn Imports by                                               
  Origin, MY 2006/2007                                                  
  (Metric Tons)**                                                       

  Country                    Oct-Dec   Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -              5,670     6,369     368         3,341      15,749

  Myanmar -                  700       0         0           0          700

  Laos -                     2,740     5,200     0           2,806      10,746

  United States -            2,012     1,123     349         514        3,999

  Peru -                     50        0         0           17         67

  Germany -                  11        4         0           0          15

  Philippines -              6         6         6           0          17

  Chile -                    0         1         1           0          2

  India -                    0         35        1           0          36

  France -                   0         0         0           0          1

  Brazil -                   0         0         0           0          0

  Others                     150       1         11          4          166

  Source: China Customs                                                  

  HS                                                                    
  Codes:10051000,10059000                                               
  -------------------------- --------- --------- ----------- ---------- -----------

  --------------------------- --------- --------- ----------- ---------- -----------
  **China Corn Imports by                                                
  Origin, MY 2007/2008                                                   
  (Metric Tons)**                                                        

  Country                     Oct-Dec   Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -               25,119                                     25,119

  Myanmar -                   15,098                                     15,098

  Laos -                      8,259                                      8,259

  United States -             1,634                                      1,634

  Peru -                      120                                        120

  Germany -                   6                                          6

  Philippines -               2                                          2

  Chile -                     0                                          0

  India -                     0                                          0

  France -                    0                                          0

  Brazil -                    0                                          0

  Others                      0                                          0

  Source: China Customs                                                   

  HS                                                                     
  Codes:10051000,10059000                                                
  --------------------------- --------- --------- ----------- ---------- -----------

  -------------------------- --------- --------- --------- --------- --------- --------- -----------
  **CHINA CORN IMPORTS BY                                                                
  MONTH**                                                                                

  (Metric Tons)                                                                          

                             2001      2002      2003      2004      2005      2006      2007

                                                                                          

  January                    18        2,449     4         34        20        2433      611

  February                   271       378       3         3         113       77        2,243

  March                      901       3,237     7         89        138       6         3,515

  April                      8,938     42        11        3         154       232       12

  May                        2,215     23        2         41        37        184       227

  June                       2,301     6         1         104       0         274       129

  July                       716       2                   44        69        94        279

  August                     7,384     55        4         683       321       52150     1,733

  September                  7,156     75        14        1,062     483       4097      1,329

  October                    312       21        0         141       339       2025      3,073

  November                   4,328     19        54        0         217       2767      10,055

  December                   1,569     15        20        104       2,083     877       11,991

  JAN-DEC TOTAL              36,109    6,322     120       2,308     3,975     65,216    35,198

                                                                                          

                             (01/02)   (02/03)   (03/04)   (04/05)   (05/06)   (06/07)   (07/08)\*

  OCT-SEP MY TOTAL           12,476    101       2,137     1,581     62,186    15,748    25,119

  \* year to date                                                                        

  HS Code: 1005.1000,                                                                    
  1005.9000                                                                              

  Source: PRC Customs                                                                    
  -------------------------- --------- --------- --------- --------- --------- --------- -----------

  ---------------- ------------ ------------ ----------- ----------- ----------- -----------
  **CHINA\'S CORN                                                                
  EXPORTS BY                                                                     
  MONTH **                                                                       

  (Metric Tons)                                                                  

                   2002         2003         2004        2005        2006        2007

  January          229,842      570,290      574,731     485,419     413,848     937,538

  February         770,204      1,765,212    443,422     119,673     1,005,517   770,248

  March            1,100,590    1,596,104    16,068      1,103,745   771,717     1,127,187

  April            855,122      551,026      72,177      529,075     40,086      578,553

  May              271,409      392,106      358,111     765,548     16,658      28,041

  June             257,892      1,818,844    165,090     1,920,091   3,923       160,399

  July             1,034,190    1,446,253    157,186     1,092,704   5,508       251,308

  August           1,652,001    1,182,624    55,373      594,601     5,487       227,792

  September        977,675      1,396,462    40,614      543,503     6,798       384,063

  October          1,268,340    1,531,617    48,572      400,797     73,467      213,226

  November         1,349,379    858,522      43,284      467,947     261,589     125,454

  December         1,906,864    3,280,392    343,533     588,711     469,401     43,943

  JAN-DEC TOTAL    11,673,508   16,389,452   2,318,161   8,611,815   3,073,999   4,847,753

                                                                                  

                   (02/03)      (03/04)      (04/05)     (05/06)     (06/07)     (07/08)\*

  OCT-SEP MY TOTAL 15,243,504   7,553,303    7,589,748   3,726,997   5,269,587   382,623

  \* year to date                                                                

  HS Code:                                                                       
  1005.1000,                                                                     
  1005.9000                                                                      

  Source: PRC                                                                    
  Customs                                                                        
  ---------------- ------------ ------------ ----------- ----------- ----------- -----------

### Table10. Wheat Trade Table

  ----------------------------------------------------------------------- ---------- ---------- --------- ----------- ----------
  **China Wheat Imports by Origin, MY 2006/2007 (1,000 Metric Tons)**                                                 

  Country                                                                 Jul-Sep    Oct-Dec    Jan-Mar   April-Jun   Total

  \--World\--                                                             166        124        69        15          374

  United States                                                           51         8          1         6           66

  Japan                                                                   3          3          1         1           9

  Australia                                                               69         106        19        3           198

  Italy                                                                   1          1          1         1           4

  Thailand                                                                0          1          1         1           3

  Korea, South                                                            2          2          1         1           5

  Indonesia                                                               0          0          0         0           1

  Hong Kong                                                               0          0          0         0           1

  China                                                                   0          0          0         0           1

  Canada                                                                  37         0          44        0           82

  Others                                                                  2          2          0         1           4

  Source: China Customs                                                                                                

  HS                                                                                                                  
  Codes:10011000,10019010,10019090,11010000,19021900,19023030,19023090,                                               
  19024000                                                                                                            
  ----------------------------------------------------------------------- ---------- ---------- --------- ----------- ----------

  ----------------------------------------------------------------------- ---------- ---------- --------- ----------- ----------
  **China Wheat Imports by Origin, MY 20072008 (1,000 Metric Tons)**                                                  

  Country                                                                 Jul-Sep    Oct-Dec    Jan-Mar   April-Jun   Total

  \--World\-- -                                                           14         13                               28

  United States -                                                         6          6                                11

  Japan -                                                                 2          2                                3

  Australia -                                                             3          1                                4

  Italy -                                                                 1          1                                2

  Thailand -                                                              1          1                                2

  Korea, South -                                                          1          1                                2

  Indonesia -                                                             0          0                                1

  Hong Kong -                                                             0          0                                0

  China -                                                                 0          0                                0

  Canada -                                                                0          0                                0

  Others                                                                  1          1                                1

  Source: China Customs                                                                                                

  HS                                                                                                                  
  Codes:10011000,10019010,10019090,11010000,19021900,19023030,19023090,                                               
  19024000                                                                                                            
  ----------------------------------------------------------------------- ---------- ---------- --------- ----------- ----------

  ---------------------- --------- --------- --------- --------- --------- -----------
  **CHINA\'S WHEAT                                                         
  IMPORTS BY MONTH**                                                       

  (1,000 Metric Tons)                                                       

                         2002      2003      2004      2005      2,006     2,007

  January                172       40        42        794       48        20

  February               27        4         105       452       4         48

  March                  16        54        120       664       98        2

  April                  156       46        439       321       72        6

  May                    38        31        789       242       62        6

  June                   57        5         1,236     303       51        4

  July                   50        5         748       174       50        3

  August                 17        47        654       190       49        6

  September              64        112       859       86        67        5

  October                40        16        1009      163       76        3

  November               17        34        640       93        33        7

  December               7         79        628       72        15        3

  JAN-DEC TOTAL          661       473       7,269     3,555     625       112

                                                                            

                         (02/03)   (03/04)   (04/05)   (05/06)   (06/07)   \*(07/08)

  JUL-JUN MY TOTAL       375       3,024     7,314     1,113     375       27

  \* year to date                                                           

  Source: PRC Customs                                                      

  HS Code: 1001.1000,                                                      
  1001.9010, 1001.9090,                                                    
  1101.0000, 1902.1100,                                                    
  1902.1900,                                                               
  1902.3030,1902.3090,                                                     
  and 1902.4000                                                            
  ---------------------- --------- --------- --------- --------- --------- -----------

  ------------------------------------------------------ --------- ----------- ---------- ----------- ----------
  **China Wheat Exports by Destination, MY 2006/2007                                                  
  (1,000 Metric Tons)**                                                                               

  Country                                                Jul-Sep   Oct-Dec     Jan-Mar    April-Jun   Total

  \--World\-- -                                          423       692         404        833         2,352

  Indonesia -                                            9         67          14         68          158

  Vietnam -                                              8         105         42         27          181

  Korea, South -                                         135       286         174        305         900

  Philippines -                                          159       85          68         273         584

  Korea, North -                                         35        35          25         32          128

  Thailand -                                             14        9           15         21          59

  Hong Kong -                                            34        35          36         36          142

  Malaysia -                                             0         0           0          0           1

  United Arab Emirates                                   0         0           0          0           1

  Bangladesh -                                           0         26          0          0           26

  Others                                                 29        43          30         70          173

  Source: China Customs                                                                               

  HS                                                                                                  
  Codes:10011000,10019010,10019090,11010000,19021900,                                                 

  19023030,19023090, 19024000                                                                         
  ------------------------------------------------------ --------- ----------- ---------- ----------- ----------

  ---------------------------------------------------- --------- ----------- ---------- ----------- ----------
  **China Wheat Exports by Destination, MY 2007/2008                                                
  (1,000 Metric Tons)**                                                                             

  Country                                              Jul-Sep   Oct-Dec     Jan-Mar    April-Jun   Total

  \--World\-- -                                        1,008     1,007                              2,015

  Indonesia -                                          197       341                                538

  Vietnam -                                            48        165                                212

  Korea, South -                                       455       118                                573

  Philippines -                                        113       86                                 198

  Korea, North -                                       34        52                                 87

  Thailand -                                           27        48                                 74

  Hong Kong -                                          39        44                                 83

  Malaysia -                                           42        39                                 81

  United Arab Emirates                                 0         27                                 27

  Bangladesh -                                         0         25                                 25

  Others                                               54        63                                 116

  Source: China Customs                                                                             

  HS                                                                                                
  Codes:10011000,10019010,10019090,11010000,19021900                                                

  ,19023030,19023090, 19024000                                                                      
  ---------------------------------------------------- --------- ----------- ---------- ----------- ----------

  -------------------------------- --------- --------- --------- --------- --------- -----------
  **CHINA\'S WHEAT EXPORTS BY                                                        
  MONTH**                                                                            

  **(1,000 Metric Tons) **                                                           

                                   2002      2003      2004      2005      2,006     2,007

                                                                                      

  January                          56        86        94        41        61        221

  February                         173       133       164       38        52        76

  March                            71        166       105       52        45        108

  April                            107       104       127       42        203       179

  May                              98        308       169       80        143       306

  June                             177       191       103       80        63        347

  July                             101       232       63        103       118       345

  August                           114       240       95        45        125       305

  September                        87        291       52        72        180       358

  October                          120       422       106       40        67        238

  November                         41        195       83        47        351       357

  December                         85        417       62        115       273       411

  JAN-DEC TOTAL                    1,230     2,785     1,223     755       1,681     3,252

                                                                                      

                                   (02/03)   (03/04)   (04/05)   (05/06)   (06/07)   (07/08)\*

  JUL-JUN MY TOTAL                 1,536     2,559     793       989       2,351     2,015

  \* year to date                                                                     

  Source: PRC Customs                                                                 

  HS Code: 1001.1000, 1001.9010,                                                     
  1001.9090, 1101.0000,                                                              
  1902.1100,                                                                         

  1902.1900, 1902.3030,1902.3090,                                                    
  and 1902.4000                                                                      
  -------------------------------- --------- --------- --------- --------- --------- -----------

### Table11. Rice Trade Table

  -------------------------------------------------------------- ------------ ----------- ---------- --------- ----------
  **China Rice Imports by Origin MY 2006/2007 (Metric Tons)**                                                  

  Country                                                        Jan-Mar      April-Jun   Jun-Sept   Sep-Dec   Total

  \--World\-- -                                                  147,712      89,833      83,632     150,365   471,541

  Thailand -                                                     147,613      78,441      74,699     138,987   439,740

  Vietnam -                                                      60           11,275      8,514      6,669     26,518

  Laos -                                                         0            0           0          4,396     4,396

  China -                                                        0            0           0          120       120

  United States -                                                0            0           0          108       108

  Pakistan -                                                     18           94          95         67        274

  India -                                                        0            20          0          19        39

  Italy -                                                        0            0           0          1         1

  Taiwan -                                                       0            1           1          0         2

  Japan -                                                        0            1           23         0         24

  Others                                                         20           0           300        0         320

  Source: China Customs                                                                                         

  HS                                                                                                           
  Codes:10061011,10061019,10061091,10061099,10062010,10062090                                                  

  ,10063010,10063090,10064010,10064090                                                                         
  -------------------------------------------------------------- ------------ ----------- ---------- --------- ----------

  ------------------------------------------------------------- --------- ----------- -------------- ----------- -----------
  **China Rice Exports by Destination MY 2006/2007(Metric                                                        
  Tons)**                                                                                                        

  Country                                                       Jan-Mar   April-Jun   Jun-Sept       Sep-Dec     Total

  \--World\-- -                                                 430,528   169,837     256,236        483,057     1,339,658

  Cote d\'lvoire -                                              24,602    54,305      28,727         197,755     305,389

  Puerto Rico (U.S.) -                                          53,855    0           28,855         53,917      136,627

  Liberia -                                                     28,038    47,574      28,034         45,452      149,098

  Korea, North -                                                11,394    9,686       26,288         33,373      80,741

  Papua New Guinea -                                            64,968    4,148       15,425         30,621      115,162

  Japan -                                                       31,568    2,866       23,018         16,961      74,413

  Nigeria -                                                     20,000    0           0              16,450      36,450

  Mozambique -                                                  0         0           0              14,650      14,650

  Vietnam -                                                     469       1,588       0              9,532       11,589

  Russia -                                                      1,691     480         3,455          9,147       14,772

  Others                                                        193,943   49,190      102,434        55,199      400,766

  Source: China Customs                                                                                          

  HS                                                                                                             
  Codes:10061011,10061019,10061091,10061099,10062010,10062090                                                    

  ,10063010,10063090,10064010,10064090                                                                           
  ------------------------------------------------------------- --------- ----------- -------------- ----------- -----------

  ---------------------- ----------- ----------- --------- ---------- ---------- ---------
  **CHINA\'S MONTHLY                                                             
  RICE IMPORTS** (Metric                                                         
  Tons, Milled Basis)                                                            

                         2002        2003        2004      2005       2,006      2,007

  January                14,139      98,410      73,217    68,586     106,306    81,658

  February               520         16,494      42,906    24,147     52,320     37,824

  March                  5,311       21,073      39,703    38,600     77,026     28,230

  April                  6,100       24,334      90,010    43,443     61,766     33,538

  May                    37,890      9,134       64,139    20,078     31,455     23,829

  June                   38,864      8,298       65,197    28,007     44,157     32,466

  July                   28,455      4,140       77,082    26,822     41,202     18,382

  August                 10,420      9,304       32,884    31,411     31,025     17,350

  September              19,040      2,420       62,978    40,224     78,904     47,900

  October                4,575       1,564       67,399    38,483     52,811     40,742

  November               16,389      5,608       55,694    50,584     45,570     40,404

  December               56,165      57,791      90,501    103,581    96,468     69,219

  TOTAL                  237,868     258,570     761,710   513,966    719,010    471,541

  HS Codes: 1006.1011,                                                           
  1006.1019, 1006.1091,                                                          
  1006.1099, 1006.2010,                                                          
  1006.2090,1006.3010,                                                           
  1006.3090, 1006.4010,                                                          
  1006.4090                                                                      

  Source: PRC Customs                                                            
  ---------------------- ----------- ----------- --------- ---------- ---------- ---------

  -------------------- ----------- ----------- --------- --------- ----------- -----------
  **CHINA\'S MONTHLY                                                           
  RICE                                                                         
  EXPORTS  **(Metric                                                           
  Tons, Milled                                                                 
  Basis)                                                                       

                       2002        2003        2004      2005      2006        2007

  January              113,566     131,654     211,346   73,325    132,225     89,970

  February             128,683     308,722     258,362   92,508    103,195     161,320

  March                112,122     124,402     231,601   35,508    66,573      179,239

  April                85,502      129,579     23,229    36,104    107,292     61,364

  May                  62,387      135,023     4,522     80,091    101,494     51,144

  June                 153,893     314,393     10,127    84,496    92,886      57,329

  July                 121,934     248,894     16,483    59,461    79,838      87,746

  August               242,846     233,489     6,597     41,595    88,380      110,516

  September            290,741     254,628     14,844    29,428    75,221      57,974

  October              203,786     201,805     22,781    28,138    108,215     127,126

  November             135,495     294,212     25,890    45,042    114,142     161,460

  December             332,127     233,397     70,235    66,109    167,439     194,471

  TOTAL                1,983,082   2,610,198   896,017   671,804   1,236,899   1,339,658

  HS Codes: 1006.1011,                                                         
  1006.1019,                                                                   
  1006.1091,                                                                   
  1006.1099,                                                                   
  1006.2010,                                                                   
  1006.2090                                                                    

  1006.3010,                                                                   
  1006.3090,                                                                   
  1006.4010,                                                                   
  1006.4090                                                                    

  Source: PRC Customs                                                          
  -------------------- ----------- ----------- --------- --------- ----------- -----------

### Table12. Barley Trade Table 

  --------------------------- ------------ --------- ----------- ---------- -----------
  **China Barley Imports by                                                 
  Origin, MY 2006/2007                                                      
  (Metric Tons) **                                                          

  Country                     Oct-Dec      Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -               371,530      309,224   287,003     159,091    1,126,849

  Australia -                 287,436      140,076   169,774     99,280     696,566

  France -                    0            4,582     1,012       29,934     35,528

  Canada -                    84,094       164,566   116,217     29,876     394,753

  United States -             0            0         1           0          1

  Netherlands -               0            0         0           0          0

  Spain -                     0            0         0           0          0

  Finland -                   0            0         0           0          0

  Mexico -                    0            0         0           0          0

  New Zealand -               0            0         0           0          0

  Japan -                     0            0         0           0          0

  Others                      1            0         0           0          1

  Source: China Customs                                                     

  HS                                                                        
  Codes:10030010,10030090                                                   
  --------------------------- ------------ --------- ----------- ---------- -----------

  -------------------------- ------------ --------- ----------- ---------- -----------
  **China Barley Imports by                                                
  Origin, MY 2007/2008                                                     
  (Metric Tons) **                                                         

  Country                    Oct-Dec      Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -              158,040                                       158,040

  Australia -                71,262                                        71,262

  France -                   43,915                                        43,915

  Canada -                   42,863                                        42,863

  United States -            0                                             0

  Netherlands -              0                                             0

  Spain -                    0                                             0

  Finland -                  0                                             0

  Mexico -                   0                                             0

  New Zealand -              0                                             0

  Japan -                    0                                             0

  Others                     0                                             0

  Source: China Customs                                                    

  HS                                                                       
  Codes:10030010,10030090                                                  
  -------------------------- ------------ --------- ----------- ---------- -----------

  -------------------------- ----------- --------- ----------- ---------- ----------
  **China Barley Exports by                                               
  Destination, MY 2006/2007                                               
  (Metric Tons)**                                                         

  Country                    Oct-Dec     Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -              3,304       5,254     19,608      20,791     48,956

  Saudi Arabia -             0           0         0           0          0

  Japan -                    0           0         15,374      17,837     33,211

  Korea, South -             3,290       5,205     4,220       2,905      15,620

  Russia -                   0           0         0           0          0

  Philippines -              0           0         0           20         20

  Malaysia -                 0           0         0           0          0

  Mongolia -                 0           0         0           0          0

  Singapore -                0           0         0           0          0

  Bahrain -                  0           0         0           0          0

  Korea, North -             0           26        0           2          28

  Others                     13          23        15          26         77

  Source: China Customs                                                   

  HS                                                                      
  Codes:10030010,10030090                                                 
  -------------------------- ----------- --------- ----------- ---------- ----------

  ------------------- ----------- --------- ----------- ---------- -----------
  **China Barley                                                   
  Exports by                                                       
  Destination, MY                                                  
  2007/2008 (Metric                                                
  Tons)**                                                          

  Country             Oct-Dec     Jan-Mar   April-Jun   Jun-Sept   Total

  \--World\-- -       72,617                                       72,617

  Saudi Arabia -      43,546                                       43,546

  Japan -             27,471                                       27,471

  Korea, South -      1,535                                        1,535

  Russia -            45                                           45

  Philippines -       20                                           20

  Malaysia -          0                                            0

  Mongolia -          0                                            0

  Singapore -         0                                            0

  Bahrain -           0                                            0

  Korea, North -      0                                            0

  Others              0                                            0
  ------------------- ----------- --------- ----------- ---------- -----------

### Table13. Sorghum Trade Table 

  -------------------------- ---------- ---------- ----------- ---------- ---------
  **China Sorghum Imports by                                              
  Origin, MY                                                              
  2006/2007(Metric Tons)**                                                

  Country                    Oct-Dec    Jan-Mar    April-Jun   Jun-Sept   Total

  \--World\-- -              2,189      800        382         994        4,365

  Myanmar -                  2,189      800        380         994        4,363

  Australia -                0          0          2           0          2

  Argentina -                0          0          0           0          0

  Brazil -                   0          0          0           0          0

  Mexico -                   0          0          0           0          0

  Uruguay -                  0          0          0           0          0

  United States -            0          0          0           0          0

  India -                    0          0          0           0          0

  Japan -                    0          0          0           0          0

  Philippines -              0          0          0           0          0

  Others                     0          0          0           0          0

  Source: China Customs                                                   

  HS                                                                      
  Codes:10070010,10070090                                                 
  -------------------------- ---------- ---------- ----------- ---------- ---------

  -------------------------- ---------- ---------- ----------- ---------- ---------
  **China Sorghum Imports by                                              
  Origin, MY                                                              
  2007/2008(Metric Tons)**                                                

  Country                    Oct-Dec    Jan-Mar    April-Jun   Jun-Sept   Total

  \--World\-- -              1,269                                        1,269

  Myanmar -                  1,264                                        1,264

  Australia -                5                                            5

  Argentina -                0                                            0

  Brazil -                   0                                            0

  Mexico -                   0                                            0

  Uruguay -                  0                                            0

  United States -            0                                            0

  India -                    0                                            0

  Japan -                    0                                            0

  Philippines -              0                                            0

  Others                     0                                            0

  Source: China Customs                                                   

  HS                                                                      
  Codes:10070010,10070090                                                 
  -------------------------- ---------- ---------- ----------- ---------- ---------

  ------------------------- ---------- ---------- ----------- ---------- ---------
  **China Sorghum Export by                                              
  Destination, MY                                                        
  2006/2007(Metric Tons)**                                               

  Country                   Oct-Dec    Jan-Mar    April-Jun   Jun-Sept   Total

  \--World\-- -             11,747     42,282     58,854      31,000     143,883

  Japan -                   3,212      26,746     42,908      18,710     91,577

  Taiwan -                  6,152      12,527     12,774      8,592      40,045

  Philippines -             301        1,098      2,200       3,010      6,608

  Korea, South -            1,650      1,500      774         399        4,323

  Netherlands -             48         0          0           0          48

  Norway -                  0          0          0           0          0

  Saudi Arabia -            24         45         12          0          81

  Greece -                  0          0          0           0          0

  United Arab Emirates -    0          0          0           0          0

  Bahrain -                 58         65         64          0          188

  Others                    302        302        123         289        1,015

  Source: China Customs                                                  

  HS                                                                     
  Codes:10070010,10070090                                                
  ------------------------- ---------- ---------- ----------- ---------- ---------

  --------------------------- ---------- ---------- ----------- ---------- ---------
  **China Sorghum Export by                                                
  Destination, MY                                                          
  2007/2008(Metric Tons)   **                                              

  Country                     Oct-Dec    Jan-Mar    April-Jun   Jun-Sept   Total

  \--World\-- -               105,526                                      105,526

  Japan -                     78,759                                       78,759

  Taiwan -                    10,864                                       10,864

  Philippines -               9,544                                        9,544

  Korea, South -              5,653                                        5,653

  Netherlands -               276                                          276

  Norway -                    206                                          206

  Saudi Arabia -              92                                           92

  Greece -                    51                                           51

  United Arab Emirates -      42                                           42

  Bahrain -                   22                                           22

  Others                      17                                           17

  Source: China Customs                                                    

  HS                                                                       
  Codes:10070010,10070090                                                  
  --------------------------- ---------- ---------- ----------- ---------- ---------