April 8, 2009
Asia Grain Outlook on Wednesday: South Korea go easy on corn imports
South Korea - a major Asian corn importer - isn't expected to be active in the market over the next few weeks, as feedmillers don't find corn prices attractive.
"Even though freight costs are low, corn prices are a bit too high at the moment. We are perfectly willing to wait a while before placing fresh orders," said a trader in Seoul.
South Korea has since last year been buying most of its corn supplies from the U.S. and some from South America, after its major Asian supplier China decided to almost completely halt its exports to meet booming domestic demand.
Traders said the landed cost of U.S. corn is currently US$210-US$215 a metric tonne, while the target price for them is around US$205-US$207/tonne.
Besides, most South Korean feed mills are well-stocked with corn until August, so they are in no hurry to place orders for the September crop.
One reason corn demand has been sluggish in South Korea so far this year is that many feed mills have replaced a large quantity of their corn with feed wheat.
Traders said that even at present, Ukraine-origin feed wheat is freely available at US$30/tonne less than corn. Feedmillers have stocked feed wheat to last until September.
In deals this week, Japan's Ministry of Agriculture didn't hold its weekly wheat import tender for the second week in a row, without giving any reasons.
The government is Japan's monopoly wheat importer.
Meanwhile, Taiwan Sugar Corporation bought 23,000 tonnes of corn and 12,000 tonnes of soybeans, both of U.S. origin, from trading house Agrex in a tender concluded Tuesday. The delivery period is April-May.
