April 24, 2007

 

Japan continues to look for China corn

 

 

Corn importers in Japan are expected to look for the crop from China this week while Taiwan buyers are seeking US corn and soybeans, traders said on Monday (April 23).

 

Japan has already covered 25 percent of their requirements for July-September shipments through purchase of US corn, traders in Tokyo said.

 

A manager at a Japanese trading firm said importers have not decided to wait any longer as Japan-US freight rates will not likely to decline.

 

Negotiations are under way for more cargoes for June, July and August shipments for China corn, traders in Tokyo said.

 

Chinese corn is often preferred by some Japanese users who pay extra to ship in small lots to their regional ports from the major ones where US cargoes arrive.

 

Japanese importers already bought 100,000 tonnes of Chinese corn within an initial quota of over 1 million tonnes Beijing had given for corn exports after March, traders said.

 

The manager at the Japanese trading firm said the cost and freight prices for Chinese corn were almost flat or at a slight premium to those of relevant shipments from the United States.

 

In Taiwan, demand is still slow as low domestic hog prices and high feed costs continue to eat into corn demand, with imports dropping more than 9 percent in the first two months to 820,685 tonnes over the same time last year, customs data show.

 

A merchant at a major trading house said pork prices are still depressed and will likely recover during the Dragon Boat Festival before results from government efforts to reduce the numbers of swine by the state-run Taiwan Sugar Corporation (TSC).

 

TSC is planning to hold a tender to buy between 23,000 and 29,000 tonnes of US corn and between 12,000 and 16,000 tonnes of US soybeans, traders said.

 

Soybean buyers have covered 30 to 50 percent of their requirements for June shipments, according to Tokyo traders.

 

Buyers are now far more sensitive to freight rates than quality of the grains and prefer to buy US soybeans to Brazilian ones, they said.

 

Reflecting resilient demand for grain and mineral transportation, the Baltic Exchange Panamax Index <.BPNI> rose to 5,470 points on Friday, up 77 points from Thursday and setting yet another high for 2007.

 

The record high for the Panamax index was 6,110 points, set on Dec. 1, 2004.

 

In Taiwan, traders were waiting to see if the Kaohsiung division of the Breakfast Soybean Procurement Association would re-tender for between 40,000 and 60,000 tonnes of US or Brazilian soybeans.