June 24, 2008

Japanese feed buyers are expected to conclude their corn imports for the third quarter of 2008 by the first week of July, a Tokyo-based grains buyer said Tuesday (June 24, 2008).

"Despite high prices of corn, Japanese feed buyers have not cut their imports, as Japanese government regulations make it difficult for feed millers to switch from corn to alternatives such as barley and wheat," said Nobuyuki Chino, a grains buyer with Unipac Grains Ltd.

Japan is expected to buy 4 million tonnes of corn for the third quarter of the year.

However, the reduction in ocean freight prices by US$8-US$10/tonne recently hae given grain buyers some relief.

The US Gulf-Japan ocean freight cost for panamax vessels is US$132/tonne at present.

Feed buyers are likely to watch CBOT corn futures before committing to buy October-December shipments, Chino said.

"Usually October-December bookings begin in late July, but feed makers are rattled by high prices. They will wait to see if CBOT corn peaks out before they begin buying for the fourth quarter," said Chino, adding that its hard to forecast when October-December corn buying will begin in Japan.

Japan buys around 16 million tonnes of corn annually, with most of the supplies coming from the US.