Wheat-growers in central Henan Province have reason to celebrate this weekend as 5,000 tons of quality food grain were shipped Friday from Lianyungang city in eastern Jiangsu Province, to Indonesia, marking a breakthrough in China's grain exports.

It is the first time that China has exported its flour-milling wheat to a foreign country since 1949.

Insiders regarded Friday's shipment as "historical progress" for the world's most populous nation, which is both the world's No.1 wheat-grower and grain importer as well as a country where food supply had long failed to meet demand.

The cargo is part of an export contract of 91,600 tons of wheat signed between Henan province and COFCO Grain & Oils Import & Export Co., the exclusive agent of the country's grain import and export.

The balance of the grain contract will be shipped to countries such as Indonesia, the Philippines, New Zealand and Vietnam over the next five months, sources said.

China, which began exporting fodder grain in April 2001, has exported one million tons to countries such as the Republic of Korea, the Philippines, Malaysia and Japan.

However, since the quality, specification and quarantine requirements for food grain are more stringent than those for fodder grain, it took some four months for international grain importers like Indonesia, Malaysia and New Zealand to complete testing on the 120-plus samples provided by COFCO.

Yang Hong, general manager of the COFCO Wheat Department, said the new move will be followed by similar endeavors if the wheat grain price on the international market remains reasonable.

The Chinese wheat grain will be exported mainly to South America, Africa and southeast Asia, said Yang during an exclusive interview with Xinhua.

The export of Chinese wheat grain is widely expected to change the mix of the global grain market and encourage more Chinese farmers to cultivate quality wheat to cater to the needs of international grain buyers.

COFCO sources said that the wheat grain shipped on Friday was exported without governmental subsidies, and the price was determined solely by supply and demand on international and domestic markets.

Experts said that the successful export of food grain can be attributed to the slowdown in global grain supply and to improvement in quality.

In the period since 1996, China has adjusted its agricultural policies and continuously bettered its crop varieties by introducing quality grains to the farming population.

Due to advances in the agricultural industry, China's grain supply has exceeded demand in recent years, laying a solid foundation for the country to export its quality grain surplus to foreign nations.

Statistics show that the crop area of quality wheat in Henan province, the country's largest grain-growing region, reached nearly 32,550 hectares this year, or one-third of the provincial total. The annual grain output of the province has been exceeding 20 billion kg for years.

In addition, the central China province has invested some 104 million yuan (12.6 million US dollars) in the research of grain processing methods, according to local sources.

Cui Yintai, director of the Henan Provincial Grain Bureau, said his production costs are lower than those of his foreign competitors and, as the quality of Henan wheat grain continues to improve, Henan wheat grain-growers will be able to handle more export orders.

China has committed itself to increasing its grain import quota to 9.3 million tons and to lowering its tariffs on agricultural products to 15.8 percent by 2004, as required by the World Trade Organization (WTO).

According to Yang Hong, grain varieties that are of high quality or which cannot be grown in China should be imported to fulfill China's WTO obligations and to increase the competitive edge of China's agricultural industry.

The export of Chinese grain has attracted global attention. Grain dealers from Japan, Vietnam, Europe, New Zealand and Australia are exploring the possibilities of buying food and fodder grain from China, which is very likely to become a global grain exporter.

Julia Liu, chief representative of the Beijing Representative Office of Toepfer International, the export dealer of the Friday cargo, said that the German company plans to import over one million tons of Chinese wheat grain in the next year.

(Xinhua News Agency November 24, 2002)