December 10, 2007
Higher prices for US corn may be stifling buying in Asia
Despite higher demand for corn used for the development of biofuels worldwide, US corn imports are falling in Asia and Africa while rising in Europe and the Western Hemisphere, figures from the USDA's Foreign Agricultural Service seem to suggest.
One factor could have been the higher prices of US corn, which forced buyers such as South Korea to seek alternative sources. The shift towards the Western Hemisphere and European markets could also indicate higher freight rates to Asia causing a decline in trans-Pacific import.
The USDA's FAS service report covers marketing year 2006/07, which ends Aug 31, 2007.
Japan remains the largest single country importing US corn.
However, the country's import of US corn was more than 1 million tonnes lesser this year, dropping 5 percent from 16.47 million tonnes in 2005/06 to 15.64 million tonnes in 2006/07.
Another major importer, Taiwan, also saw imports of US corn fall from 4.95 million tonnes in 2005/06 to 4.52 million tonnes in 2006/07, a 9-percent drop. This volume makes it the second largest US corn importer in Asia.
The greatest loss by volume imported seems to be felt in South Korea, where there was a 1.5-million-tonne drop.
South Korea, who used to be America's second largest customer for US corn, fell to third place as import fell from 5.57 million tonnes in 2005/06 to 4.08 million tonnes in 2006/07, a drop of 27 percent.
Among the major Asian importers ( those with more than 100,000 tonnes), Jordan, Indonesia and Saudi Arabia saw declines while Lebanon, Israel and Syria saw increases.
In Asia, Indonesia saw the most drastic decline, with imports falling from 888,500 tonnes in 2005/06 to just 111,000 tonnes in 2006/07 while Syria saw the greatest increase, doubling from 686,000 tonnes in 2005/06 to 1.43 million tonnes in 2006/07.
Overall, US corn imports to Asia fell 16 percent from 9.00 million tonnes in 2005/06 to 7.59 million tonnes in 2006/07, a 1.41 million tonne drop.
US corn exports to Africa also fell from 7.5 million tonnes in 2005/06 to 5.8 million tonnes in 2006/07, a 22-percent drop(1.67 million tonne decrease).
Egypt, the continent's largest buyer, saw imports fall 18.6 percent from 4.3 million tonnes to 3.5 million tonnes while Morocco and Algeria, whom each imported more than one million tonnes in 2005/06 saw volumes drop below the 1-million-tonne level. The three countries are the biggest US corn buyers in Africa.
However, the combined 3.1 million tonne drop in Asia and Africa was more than made up for by a rise of 3.7 million tonnes imported by countries in the Western Hemisphere whose US corn imports rose 22.7 percent to 20.1 million tonnes.
Mexico, the largest importer of US corn in the Western Hemisphere, saw imports climbing 37 percent from 6.65 million tonnes to 9.11 million tonnes.
Columbia, the second largest importer, witnessed a 22-percent rise in US corn imports from 2.68 million tonnes to 3.27 million tonnes.
Canada and the Dominican Republic both saw US corn imports rising from 1.1 million tonnes last year to 1.2 million tonnes.
The EU-27's import of US corn rose five-fold during the year, although volumes were small relative to other markets.
The EU-27's US corn imports rose from 6,900 tonnes in 2005/06 to 37,500 tonnes in 2006/07, with Spain the largest importer at 6,200 tonnes.
Another big importer of US corn outside the EU-27 is Turkey, which imported 350,000 tonnes from zero last year. Romania's corn import also rose from zero last year to 31,500 tonnes this year.
Worldwide, however, the figures seemed to suggest US corn imports were slightly down from last year, with 2006/07 figures at 54.07 million tonnes, slightly lower than the 54.35 million tonnes achieved last year.
However, the figure has to taken into account carryover sales, which was at 2.26 million tonnes in 2005/06 and rising to 2.49 million tonnes in 2006/07.
The full report can be accessed at http://www.fas.usda.gov/export-sales/myfiaug.htm
