February 26, 2004

South Korean Grain Buyers Turn To Private Talks
 
With soaring grain prices, South Korean buyers are preferring to hold private talks instead of open tenders to meet their requirements, a Seoul-based trader said Thursday.
 
"If they announce open tenders, people will know the prices" at which they bought, so these grain buyers prefer to hold private negotiations, he said.
 
A recent deal concluded by a feedmill this week was for 23,000 metric tons of feedwheat, worldwide origin, at $185/ton, cost and freight basis to Inchon for May 20 arrival, he said.
 
The seller was Noble Group, while the buyer is a member of the Korean Feed Association and Major Feedmill Group, he said.
 
In comparison, a tender held by the Taiwan Flour Millers Association Wednesday for U.S. wheat was settled in a price range of $163.98-$195.99/ton, free on board from the U.S. Pacific Northwest.
 
Just less than a week ago, on Feb. 19, the association's central division bought 43,000 tons of U.S. wheat in a price range of $154.28-$186.44/ton, free on board from the U.S. Pacific Northwest.
 
Tightening global grain supply, leading to rising prices on the Chicago Board of Trade, have lifted grain prices on the physical trade, as seen in recent tenders.
 
South Korean buyers are also looking to buy corn of other origin, such as Chinese or Southeast Asian, as the U.S. and South American corn prices are too high, said the Seoul-based trader.
 
Thai and Indonesian corn prices have been rising, to more than $180/ton, C&F basis, currently from $170/ton two weeks ago, he said.
 
Although offers for Chinese corn are almost absent, the trader estimates that it would cost $170-$175/ton, FOB China, with freight ranging from $16- $20/ton.
 
Still, most of these prices are cheaper than U.S. corn, which costs $195.60/ton, C&F basis, he said.