February 27, 2004

Vietnam Strikes First Corn Export Deal in Several Years

Vietnam has sold 40,000 tonnes of corn in what traders believe to be the first such export by the country in several years, a senior grains trade official said on Friday.

"The destination has not been finalised. It could go to Malaysia, maybe South Korea," said Kimberly Rameker, regional director for Southeast Asia of the U.S. Grains Council.

Regional traders said they were not surprised to see sales by a nation which depends on some imports from China every year to meet the demand from its commercial feed sector.

"The scramble is there all over the place. It's possible Vietnam might have sold some," said one Singapore-based trader.

Rameker, who returned from a trip to Vietnam, said she was not aware of the price at which the deal was finalised.

The sales by Vietnam came after grain traders said on Thursday that Indonesia had sold cargoes to take advantage of China's absence from the market, which, coupled with tight U.S. stocks, has pushed world corn prices to fresh 6-½ year highs.

Vietnam joins Thailand, India and Indonesia -- non-traditional exporters who are offering this year more than the usual amounts as leading buyers scramble for shipments.

China, the world's second-largest corn exporter after the United States with sales of a record 16.4 million tonnes in 2003, is expected to see sales drop to less than four million tonnes this year as it struggles to rein in rising domestic food prices amid eroding grain stocks.

Small trading houses now depend on cargoes from Asian suppliers as they try to avoid bringing in U.S. cargoes and paying high freight rates.

The landed cost of corn in Southeast Asia from most non-traditional suppliers is between $175 and $185 a tonne, while U.S. corn currently hovers close to $200 a tonne C&F.