Chai-Na-Ta Corp. Reports 2004 Third Quarter Results.

RICHMOND, British Columbia -- Chai-Na-Ta Corp. (OTCBB:CCCFF) (TSX:CC), the world's largest supplier of North American ginseng, today announced third quarter 2004 net earnings of $252,000, or $0.01 per basic share, compared to a net loss of $53,000, or $0.00 per basic share, in the quarter ended September 30, 2003.

Revenue rose to $2.7 million in the 2004 third quarter from $0.5 million in the corresponding period last year.

"Ginseng root prices rose to an average $25 a pound for our sales in the first nine months of 2004 from about $17 per pound in the same period last year. Increasing prices, combined with the strength of the Canadian dollar relative to the Hong Kong dollar, have led buyers in China and Hong Kong to postpone purchasing decisions and affected the North American ginseng industry as a whole. Consequently, we now expect that Chai-Na-Ta's operating income and net earnings in 2004 will be significantly below 2003 levels," said William Zen, Chairman and Chief Executive Officer.

"However, Chai-Na-Ta will reduce the average selling price of its root in the fourth quarter in order to stimulate sales. Approximately 48% of our 2003 harvest root was sold by September 30, 2004 compared to 100% of the 2002 harvest root at the same time last year. We anticipate selling close to 75% of the 2003 harvest root by year-end 2004. Meanwhile, we continue to expect that our balance sheet will strengthen year over year," Mr. Zen said.

Gross profit margin was 36% of sales revenue in the 2004 third quarter compared to 71% in the same period last year.

Selling, general and administrative expenses in the quarter ended September 30, 2004 were $0.5 million, compared to $0.4 million in the same period last year.

In the nine months ended September 30, 2004, revenue fell to $6.3 million from $11.8 million in the same period last year. Gross profit margin rose to 41% of sales revenue in the nine months ended September 30, 2004 from 33% in the first nine months of 2003.

Net earnings in the first nine months of 2004 were $0.7 million, or $0.03 per basic share, compared to net earnings of $1.4 million, or $0.10 per basic share in the corresponding 2003 period. The decrease in net earnings resulted mainly from lower sales volume in the nine months ended September 30, 2004 compared to the same period last year.

The cash deficit from operations was $0.3 million for the nine months ended September 30, 2004 compared to a surplus of $2.6 million in the comparable 2003 period. "This decline resulted mainly from lower revenue period over period. Notwithstanding this challenge, we are confident that our ability to generate cash in the short term through the sale of inventory is sufficient to finance the Company's operations," said Mr. Zen.

Net capital expenditures increased to $2.7 million in the first nine months of 2004 from $1.4 million in the same period last year, as the Company pursued its plan to construct new processing facilities in Ontario. The facilities were completed on schedule and are now in operation.

Chai-Na-Ta Corp., based in Richmond, British Columbia, is the world's largest supplier of North American ginseng. The Company farms, processes and distributes North American ginseng as bulk root, and supplies processed material for the manufacture of value-added ginseng-based products.

This news release contains forward-looking statements that reflect the Company's expectations regarding future events. These forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected. Such risks and uncertainties include, but are not limited to, the success of the Company's ongoing research programs, general business conditions, and other risks as outlined in the Company's periodic filings, Annual Report, and Form 20-F.