June 11, 2012
Vietnam imports Indian corn, Philippines eyes Australian wheat
For shipment in July, Vietnam imported some 20,000 tonnes of Indian corn this week, while the Philippine buyers are in discussion to buy 50,000 tonnes of Australian feed wheat for August arrival.
"In the Philippines they have 30% import duty on corn which discourages imports," said one trader with a global trading company in Singapore. "They will continue to buy expensive feed wheat."
Asian grain processors were showing interest after staying on the side lines for a couple of weeks with global grain prices recovering after a decline.
"There is a view among some of the buyers that prices might go higher, so there is some covering taking place," another Singapore trader said. "But people are also keeping an eye on the euro zone crisis."
Vietnam has been snapping up Indian corn cargoes, taking advantage of competitive prices. Last week, one large feed mill bought 30,000 tonnes of July and August arrival, paying between US$250-255 a tonne, C&F.
This compares to South American corn being offered at US$265 a tonne and US corn around US$275 a tonne for July shipment. India could also be in the market selling wheat with government's stocks climbing to an all-time high.
India's wheat inventory at government warehouses surged to a record 50.2 million tonnes on June 1, exposing more stocks to rot as unattractive global prices have hobbled government efforts to export from its overflowing grain bins.
Global grains traders are closely watching India's move to subsidise grain exports as stocks become unmanageable with some expecting a discount of around US$20-30 a tonne.
South Korea's largest feed maker Nonghyup Feed is seeking up to 170,000 tonnes of corn for arrivals between July and December via tenders which close later on Friday.
Japan, which has been slow in buying corn this year because of higher prices, has yet to cover some 450,000 tonnes for August delivery. It is open for bulk of the need for September, traders said.
"Mills have been slow in buying corn because it was expensive," said one Tokyo-based trader. "Buyers expect corn prices to come down further because of a large US crop."
Japan's farm ministry bought 180,537 tonnes of milling wheat from the US, Canada and Australia, as much as it offered, in a weekly tender. South American soymeal being offered in Asia's cash market rose between US$10 and US$15 a tonne to US$540 a tonne C&F, almost at par with cargoes being offered from India.
The benchmark Chicago soymeal has risen about 7% this week, driven by higher soy values and strong demand. Malaysia has covered its requirement of corn until August and the country could be looking to buy some 120,000 tonnes in the weeks ahead.