March 20, 2015
China gets over 600,000 tonnes of corn from Ukraine
Ukraine is set to ship over 600,000 tonnes of corn to China, which is expected to ink more export deals as it copes with strained local supplies and rising domestic prices due to its stockpiling policy.
Ultimately, US corn exporters stand to lose out in the export trade to China with the latter's intention to import Black Sea shipments under a loan-for-grain agreement. This is reflected in a fourth consecutive session of decline for US corn futures this week to close to a six-week low with the Chinese acquisition of Ukrainian corns.
Traders blamed the dwindling popularity of US corn on US suppliers who had asked Chinese buyers to shoulder the cost resulting from the possible risks of importing genetically modified corn.
According to a buyer, Ukrainian shipments for the April-May period were set at about US$336/tonne, including cost and freight. The price represented a lower 60%, compared to local corn, in the major port of Shenzhen.
Interestingly, US corn is quoted at about US$18/tonne cheaper than Ukrainian corn, traders claimed.
Under a loan-for-grain deal, Ukraine managed to deliver close to one million tonnes of corn to China in 2014. In January this year, Ukrainian shipments to the Mainland reached 470,047 tonnes, overtaking the US, according to official customs data.