May 31, 2007
China's corn exports to Japan to continue gradually
Japan will buy 30,000 tonnes of Chinese corn monthly as Beijing recently set a quota of some 1.3 million tonnes, but high prices and volatile supply may limit purchases beyond September, traders said.
Japanese government data showed on Wednesday that Japan's imports of corn for feed use from China totalled 28,900 tonnes in April, more than triple the 8,600 tonnes a year earlier.
But these figures had China account for three percent of April's total feed corn imports of 882,700 tonnes, and the remaining 853,800 tonnes came from the United States.
Despite a steep year-on-year rise in April imports, Japanese buyers are limited to regular users of Chinese corn as it less attractive than US or Argentine corn when freight rates are included, traders in Tokyo said.
Traders also said the initial quota Beijing provided last month has been mostly used, with South Korea as the main buyer.
Beijing was expected to provide another quota for corn exports later this year. But if not, shipments for July-September would be the last ones from China, they said.
Traders said the cost and freight (C&F) price of Chinese origin corn for July-September shipment is offered US$5 to US$10 a tonne higher than that of June-August shipments of US origin, both based on a Panamax vessel.
However, the premium against US origin can be affordable for feed makers based in southern Japan, and especially for those who pay extra to ship in small lots to their regional ports from the major ones where US cargoes arrive.
In China, domestic corn prices has increased for seasonal reasons this month after coming under pressure from a record crop and poor demand from the feed and ethanol industries.
Corn prices in Dalian are up about 20 percent, compared with May of last year.
Japan, the world's No.1 corn importer, imported 11.66 million tonnes of corn for feed use in the year to March 2007 and about 3.5 percent or 408,900 tonnes came from China.
