August 8, 2008

South Korea may probe prices with corn tender

The Korea Feed Association, the country's leading grain-buying group, is likely to issue tenders within 2 weeks to buy up to 165,000 tonnes of corn as global prices of the grain soften, traders said on Thursday (August 7, 2008).

South Korea is expected to purchase 2-3 corn cargoes of 55,000 tonnes each for delivery in December.

Corn prices have eased due to ideal weather fuelling the prospect of a larger than expected crop in the Midwest, the nation's breadbasket. However, droughts may still affect corn yields in the southern states. 

CBOT corn has lost a third of its value since reaching a record high of US$7.65 in June.

Market watchers say Korean feedmakers may be testing the waters with the tender.

The country is the world's third largest corn importer.

High corn prices have recently prompted the nation to look at growing its corn in other Asian countries such as Indonesia and expanding its own corn acreage. More of the country's feed producers are also turning to wheat, the cheaper option.