April 13, 2009
Marubeni signs deal to procure grain for China stockpiles
Japanese trading firm Marubeni Corp. has signed a comprehensive agreement with China Grain Reserves Corp., or Sinograin, a state-run firm that manages the country's grain stockpiles, The Nikkei reports in its Sunday editions.
Marubeni will procure soy and grain products for Sinograin outside China and the partners will also invest in shipment facilities in producer countries.
China aims to secure and stabilize its grain imports using Marubeni's procurement strength. The Japanese firm, for its part, will gain a major new marketing channel in China and increase its bargaining power with grain producers.
This is the first time for a Chinese firm to establish a business alliance in the area of food reserves.
Sinograin was established in 2000 to support the country's food-stockpiling efforts. It manages about 75 million tonnes of grain, including stockpiles, annually - about twice Japan's total grain and bean demand.
Marubeni plans to initially procure 4 million tonnes of soy, almost equal to Japan's total imports, from the US and South America in the first year for delivery to Sinograin. The firm plans to expand its business with Sinograin to include the procurement of corn and wheat.
