By Wang Wei
The gap between the price of grain on the world market and subsidized prices within China is proving an irresistible incentive to smugglers.
The gap between the price of grain on the world market and subsidized prices within China is proving an irresistible incentive to smugglers.
In June 2008, Qingdao Customs uncovered a large scale smuggling operation carried out by a company based in Fujian Province. Flour, labeled as zinc oxide, was being exported to Thailand, the Philippines and Singapore. Subsequent investigations revealed the company had smuggled 2,288 tons of flour out of China since February.
In early September, customs officers in Gongbei, on the border between Guangdong and Macao, busted a smuggling operation after a Shenzhen company applied for permission to export a consignment of steel doors and roof tiles. Officers found 100 bags of flour, weighing 2,500 kg, in a truck supposed to be carrying roof tiles.
According to China's General Administration of Customs, dozens of grain smuggling cases were detected in Shenzhen, Hangzhou and Ningbo during the first half of 2008. In June alone, seven illegal shipments were discovered in Guangzhou.
"The international price is a magnet for smugglers," said an officer at Gongbei Customs.
Since May rice on the international market has been fetching around 12 yuan (US$1.76) per kilogram, around four times the internal price of 3 yuan (US$0.44). The international flour price has approached 7,000 yuan (US$1,026.44) per ton while the internal price is around 5,800 yuan (US$850.48). The chance to make easy money is hard to resist.
"These people are just fleecing the country," said a customs officer from the Huangpu Customs.
The General Administration of Customs has told local customs departments to step up enforcement activities.
But some say the only long-term answer is to remove the incentive to smuggle by allowing the price of grain to rise towards the world market price. "This would not only reduce smuggling but also increase rural incomes and encourage farmers to increase grain production," said one food expert.
(China.org.cn September 25, 2008)
