However the fact that Chinese policymakers felt comfortable enough with domestic supplies to open the door to export markets could send a bearish signal to already depressed global prices, suggesting it may be some time still before the most populous nation needs to import staple foodstuffs to feed its people.

Beijing will allow export of 500,000 tonnes of corn, 500,000 tonnes of wheat and a small amount of rice, two industry officials with knowledge of the government's plan told Reuters. Other sources put the rice export quota at about 200,000 tonnes.
The relaxation on grain exports follows projections for a record 528.5 million tonnes harvest this year, up 5.4 percent as farmers worked double-time to cash in on the surge in global prices, despite shrinking arable land and the exodus of farm labour to China's booming coastal metropolises.

But traders said the export volumes would be too small to support domestic prices, and anyway costlier Chinese grains were not attractive for international buyers.

"The amounts were not much, but the government intends to support domestic grain prices," said one grain source who declined to be identified. It was not clear if Beijing would offer some support to enable the exports to happen.

The corn export quotas were much lower than the 5 million tonnes that some market participants had hoped for.
"Domestic prices are still higher than (U.S. corn). I don't think we can export," said a trading manager with Jilin Grain Group, one of two authorised corn exporters. The manager said Beijing had not agreed to offer any financial support on exports.
COFCO, the main state-owned grains trader, will have a quota to export up to 150,000 tonnes of corn, while the rest will be allocated to major corn areas, including Jilin and Heilongjiang, traders said.

Beijing has already agreed to buy 30 million tonnes of corn in the northeast provinces for state reserves, about a fifth of the domestic harvest, to support domestic prices that are under pressure amid weak demand from feed makers and processors.

China last month had also scrapped an export tax on corn and starch while reducing the duties on wheat and rice, reversing measures imposed earlier in the year as Beijing sought to lock in more supplies at home amid global tightness in grain supply.

China exported 2.33 million tonnes of wheat, mainly to southeast Asia, in 2007, and 4.9 million tonnes of corn as well as 1.325 million tonnes of rice.

(Additional reporting by Coco Li, editing by Tom Miles)