Though the current lowest Chinese offer was about $123 a tonne on a free on board basis, prices might move down towards $120 in the near future, some traders said. Prices were at $130 in December, and fell to $126-$127 in January.
Provincial governments in north-east producing areas, such as Jilin province, were considering other support measures for the exports, such as waivers for railway construction taxes, following a record 2004 harvest of 132 million tonnes, they said.
"Now Argentine corn is less competitive than a few weeks ago," said a trader in Shanghai. "I think some Chinese business has been done.
Their sales so far this year might total more than one million tonnes."
Though a monthly shipment level of 300,000-400,000 tonnes would be far less than the one million seen in 2003, it would be a substantial increase from November's 43,284 tonnes. December exports stood at 343,533 tonnes.
The traders said Chinese corn exports were also helped by freight rates, which moved up about $10 in the past 10 days alone due to active grains sales by South America harvesting bumper crops, making its exports to nearby South Korea and other Asian markets more competitive than those from more distant South American suppliers.
It costs about $67-$68 a tonne to bring grains to Asia from South America in Panamax-sized vessel, traders said.
"The (freights) market looks strong," said an official at one of the world's top shipping companies, in charge of dry bulk cargoes. "There are not enough vessels available in Brazil or Argentina from early March to about late March."
One grains trader in Beijing said: "They (Asian corn buyers) may switch back to China. It's not only what the Chinese governments will do. I am watching how far freights go."
Data compiled by Beijing Xinhua Guoxin Information Services Co Ltd showed destinations so far this year included South Korea, Japan and North Korea as well as Southeast Asia, including Indonesia and the Philippines.