February 5, 2004

 

 

South Korea Feed Group Pins Hopes On Chinese Corn Supply In April

 

Despite rising U.S. corn prices and freight rates, a major South Korean feed group has decided against buying the cheaper Thai corn and has instead chosen to hope that China will resume its corn exports in April, a senior industry official based in Seoul said Thursday.

 

Thursday, it was understood that this South Korean feed group held a meeting after some members suggested buying Thai corn to offset the expensive U.S. corn, the official said.

 

U.S. corn now costs more than $195 a metric ton from the Gulf of Mexico, cost and freight to South Korea, whereas Nonghyup Feed Inc. and Major Feedmill Group recently bought Thai corn at $173.50/ton and $169.50/ton respectively, C&F basis, said traders.

 

However, the Seoul-based official said other members in the major South Korean feed group decided against importing Thai corn due to the high levels of aflatoxin found in corn of Southeast Asian origin.

 

Aflatoxin is a naturally occurring mycotoxin produced by a type of mold that grows on grains with high moisture contents, such as bean and corn. It can't be destroyed completely by heat and could cause liver cancer.

 

Thus, the feed group could start buying Chinese corn in April, when it expects China to resume corn exports, the trader said.

 

Following lower output and dwindling stocks, China ceased offering corn for 2004 shipments late last year. There are expectations that China will cut its financial support for corn exports in 2004 to try to preserve domestic stocks.

 

There is talk that China may announce its export intentions only after March.

 

The South Korean feed group "might consider buying Chinese corn in April," said the Seoul-based trader.

 

"We heard the Chinese government will decide in April whether it will export," he said.

 

The feed group has just covered its requirements until April, and its next tender may cover arrival dates for either end-April or early-May, said the trader.