June 5, 2007 

China's corn sales to Japan may slow down

China has recently announced a 1.3-million-tonne corn export quota, according to traders. Based on this quota, shipments to Japan could average 30,000 tonnes per month. However, due to the rise in Chinese corn prices in the past few weeks, corn exports to Japan may slow down.

According to a May-30 Chinese government release, Japan imported 28,900 tonnes of feed corn from China in April, which is three times the import volume in April last 2006. Despite this significant increase, China is still not the main source of corn for Japan. The US sold 853,800 tonnes of corn to Japan in April, or 97 percent of Japan's total corn import volume. 

One trader said that regular buyers still form the bulk of Japanese purchasers of Chinese corn in April. After factoring in ocean freight charges, US and Argentine corns were still attractive to feed millers in Japan.

Meanwhile, the trader added that China's corn export quota announced last month had been used up, with South Korea being the major buyer. Corn shipments from July to September will be last if no new export quotas are announced for this year.

The trader also mentioned that CNF quote for China's corn shipment (July to September) is US$5-10 higher compared with June-August shipment from the US in Panamax vessels.

Japan is the world's biggest corn importer by volume. In the 2006/07 marketing year (April 2006 - March 2007), Japan imported 11.66 million tonnes of feed corn, of which 408,900 tonnes, or 3.5 percent, are from China.

RMB1=US$0.1309 (Jun 5)