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October 31, 2011

 

Southeast Asia to become one of the world's biggest corn importers

 

 

Southeast Asia is set to become one of the world's largest importers in the corn market, and may surpass South Korea and Mexico within a few years.

 

Feed production had grown in "every single South East Asian market", a region which includes Indonesia, Malaysia, Thailand and Vietnam, to meet growth in livestock farming, the US Grains Council said.

 

However, with their own grain output capacity limited by a dearth of land, as in China, the South East Asian countries are being forced to turn increasingly to imports for raw materials for feed.

 

"The region is expected to import a record 7.5 to eight million tonnes of corn in 2011," a figure up 60% in three years, USGC regional director Adel Yusopov said.

 

Indeed, corn imports by Indonesia alone looked set to hit 2.5 to three million tonnes this year, ahead of USDA forecasts.

 

And this trend is expected to continue, as wealthier consumers increase their meat consumption, as China's are doing.

 

"We're seeing burgeoning feed demand," Yusopov said.

 

"I believe South East Asia's growing appetite for meat and shortfalls in local production will create a corn market bigger than that of South Korea or perhaps even Mexico within a few years."

 

Mexico is the world's second-ranked corn importer, with purchases estimated by the USDA at 9.2 million tonnes in 2011-12, with South Korea the third biggest.

 

The US Grains Council charged with promoting exports of US crops believes this is one area where American exports can shine too, by taking market share from Argentina, to where South East Asia has traditionally gone for purchases.

 

In the year to August, US corn exports to South East Asia reached 397,000 tonnes, 10 times the level of the same period last year, USDA data show.

 

"South East Asia's regional feed millers have been sitting on the edge of their chairs watching the Chicago corn market," Yusopov said.

 

"Millers are taking advantage of every temporary dip in the price of corn

 

The comments come the day after official data revealed an 81% slump in weekly US corn sales to their lowest of 2011-12, a figure which on Friday continued to attract negative comment, being branded "weak" by Barclays Capital and "very poor" by broker US Commodities.

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