December 21, 2009
Indonesian mills snap up corn cargoes
Rising domestic prices have prompted Indonesian feedmills to seek imported cargoes as 40,000 tonnes of foreign corn were procured in two deals signed this week.
One cargo of Argentinian corn was bought for around US$235-US$240 per tonne, including cost and freight, while Thai corn was bought for US$240-US$245 per tonne, with both cargoes expected to arrive in January.
Feedmillers are looking to buy corn for the first quarter of 2010 as local prices have risen in the past one week, which encourages imports, according to a Singapore-based trading manager.
But Indonesia is unlikely to become a large importer in 2010 due to ample domestic supplies. Feed grains traders said feedmillers are simply taking advantage of prices to buy some quantities, and the arrival of local production in the market should limit imports.
Indonesia's corn production is expected to increase to 17.7 million tonnes this year, up from 16.3 million in 2008 and 13.3 million in 2007, according to the government's November estimates.
Indonesia's domestic corn prices have risen by US$10-US$15 a tonne to US$250 a tonne this week as there was a temporary tightness in supplies.
The harvest is ongoing and it is not a free flow of corn, and supplies are tight because some farmers are holding back stocks to get higher prices.
Indonesia is largely self-sufficient in corn, buying about 200,000 tonnes in 2009, mainly from Thailand, due to lower global prices.
Malaysia is also in the market, seeking 60,000 tonnes of corn for February shipment, and a deal could be concluded this week, traders said.
Southeast Asian buyers usually buy corn from India at this time of the year, but they are not doing so this year because of high moisture content due to erratic monsoon rains.
Market traders dealing with both Indian and South American corn in Asia said Indian corn currently has a moisture problem and they will wait until January to see the quality before doing any bulk trades.
