March 16, 2004

Asian Feedmillers Turn to Cheaper Indian Corn

Feedmillers in Asia are turning to Indian corn for nearby shipments, attracted by its relatively cheap price, trade participants said on Monday.
 
In the absence of corn from China and with US corn prices sky high in comparison, India has turned into a net corn exporter.
 
According to Atul Chaturvedi, president for Agro at the Ahmedabad- based Adani Exports Ltd., a good harvest in India prompted the country to export its surplus corn to other Asian countries like South Korea, Sri Lanka and Malaysia. India started exporting corn from its latest harvest in December 2003.
 
"India can offer corn at a very competitive price," Chaturvedi said.
 
South Korea is very keen on Indian corn. Considered to be among the world's biggest importers and consumers of corn, South Korean feedmillers are also reputed to be price-conscious buyers.
 
With U.S. corn priced at $190-$195 a metric ton, cost and freight, April-May shipment, most South Korean feedmillers prefer to buy Indian corn which is being offered for around $180-$185/ton, C&F.
 
In private negotiations held March 10, the Seoul-based Major Feedmill Group bought 50,000 tons of Indian corn for about $178-$179/ton, C&F, May-June shipment.
 
A Singapore-based manager in a global commodities trading house said China's absence in the export market has boosted consumers' interest in Indian corn.
 
China has always been a main source of low-priced corn for price-sensitive buyers such as South Korea. But owing to its lean harvest and dwindling stockpile, China halted corn exports this year.
 
Despite persistent rumors that China will soon return to the export market, the Singapore-based manager doubts that China can export much.
 
"China won't be big in the export market this year," he said, adding that China's corn harvest can barely meet the growing local demand.
 
But traders said millers in Asia will still import U.S. and/or Argentine corn as India doesn't have enough supply to feed the thriving feed and livestock industries in Asia.
 
A grains trader in Mumbai said that from December 2003 until June 2004, India can only export 500,000 tons.
 
South Korea alone needs to import roughly 700,000 tons of corn each month.