April 26, 2011

Vietnam seeks to buy corn and soymeal

Feed millers in Vietnam are looking for corn and soymeal shipments for June-July arrival and most businesses are likely to be cornered by South American suppliers because of competitive prices.

Buyers are in talks for 35,000 tonnes of corn for June shipment and some 200,000 tonnes of soymeal for June-July arrival, said traders in a meeting in Singapore.

"The bulk of it will be South American corn and soymeal as Indian prices have gone up," said a trader. "For corn, it is not just the prices; there are quarantine issues, so no one will be willing to take the risk."

Indian soymeal was quoted around US$440 to US$445 a tonne, including cost-and-freight, nearly the same as soymeal from Argentina. Buyers in Southeast Asia prefer Indian soymeal only if it is US$10 to US$15 lower than what is being offered from Argentina.

Indian corn is likely to face increased scrutiny after authorities in Vietnam, a leading buyer of Indian corn and soymeal, rejected 50,000 tonnes of the grain and feed in February after finding insects in cargoes. "We are looking for 35,000 tonnes of yellow corn, ideally this should be Indian corn but we are not sure what will happen to the cargoes when they arrive," said another trader.

But Vietnam has been taking deliveries of Indian corn and soymeal since March despite the rejection of two shipments for insect infestation, although fears remained that cargoes could still be turned away on quality or fumigation issues. India exports around 300,000 tonnes of corn and 700,000-800,000 tonnes of soymeal each year to Vietnam.

Vietnamese traders are also exploring the possibility of buying soy from Paraguay.

India, which has been selling large volumes of corn to Indonesia in recent weeks, is likely to see slower sales with exporters lifting prices in the face of strong demand and tight world supplies.

Indian corn prices have increased to US$355 to US$360 a tonne cost-and-freight, compared with cargoes sold at US$330 a tonne about 10 days ago. Corn from Argentina was being offered around US$365 to US$370 a tonne.