August 6, 2008

 

Japan's Marubeni to buy corn, soy directly from US farms
   
   

Marubeni Corporation has acquired storage facilities in grain-producing regions of the US, as part of a plan to buy corn and soy directly from farmers and bypass major distribution companies, according to Japanese daily The Nikkei in its Wednesday edition.

The major trading house purchased eight grain-storage facilities and two warehouses for agricultural materials from major US soy-processing firm AG Processing Inc. The North Dakota and Minnesota facilities cost an estimated Y5 billion.

 

Marubeni plans to buy corn and soy from nearby farms, and store them at the facilities. The grain will be transported via railroad to ports on the US West Coast for export to Japan. Marubeni expects annual shipments of 600,000 tonnes starting next year.

In the US, major grain companies such as Cargill and Archer Daniels Midland (ADM), and cooperative grain marketers such as CHS Inc., control the distribution infrastructure for grain, including warehouses, export terminals and ports. Japanese firms have been unable to buy large amounts of grain directly from US farmers without going through these firms.


Direct transactions with US farmers will allow Marubeni to request crops tailored to the Japanese market. For example, although there is strong demand for non-genetically modified corn and soy in Japan, they have become increasingly difficult to procure, because US farmers often plant only larger-yielding genetically modified versions.

 

Japanese trading houses have been scrambling to build networks for stable food procurement, since sharp growth in the purchasing power of China and other developing countries has contributed to a global surge in grain prices.
   

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