May 3 2010

 

Malaysia's May-June bulk corn imports likely at 300,000 tonnes

Malaysia's corn imports in bulk shipments during May-June are likely to be close to 300,000 tonnes, up from around 270,000 tonnes in March-April, according to trading executives.

 

They said this may put downward pressure on prices, which have risen in recent weeks.

 

Most of Malaysia's corn imports come from the Americas, but small volumes are also purchased from India.

 

Import supply has been slow for the last few months and this has pushed up local prices to around MYR860 a tonne (US$269) from MYR840/tonne early last month, a trading executive said.

 

He said supplies are expected to ease from June 15 onwards as more cargoes are scheduled to arrive from South America.

 

Malaysia needs to buy more than 200,000 tonnes of corn each month to meet its local feed-milling requirements, but purchases have been slow in recent months.

Imports are usually contracted around two to three months in advance but also depend on international prices and existing inventories.

 

Traders said some purchases were deferred in anticipation of a sharp fall in prices because of the bumper crop in Brazil and Argentina. Global corn prices did fall in the first quarter but when they were expected to slump further, there was a rebound due to fresh demand from China after many years and short-covering by speculative funds on the Chicago Board of Trade.

 

Many traders expected CBOT corn futures to fall to US$3.20/bushel in April-May, but the most-active corn contract for July delivery Thursday (Apr 29) climbed to US$3.78/bushel, its highest price since March 23.

 

Malaysia has now covered most of its corn import requirements until July and as supplies arrive, prices are likely to be subdued, said a Kuala Lumpur-based importer.

He said some purchases have also been made from India, but high-level of moisture in the grain is posing problems.

 

India is selling both container shipments and bulk shipments to buyers in Malaysia to meet immediate demand. Traders said there is also concern that exporters in India may try to renegotiate earlier sale contracts because of the rise in local prices, despite the ongoing harvest.