September 2, 2003

 

 

Private Deals Amongst Feed Importers in South Korea Make Market Situation Unpredictable

 

It was reported on Sept 2 that an increasing number of South Korean importers are seeking to buy grains for feed production via private deals rather than through public tenders in a bid to get cheaper prices.

 

This means there is little immediate information for the broader market as details on the deals, mainly for corn, soybean and soymeal imports, are restricted between buyer and seller at least for a few days, traders said. "Suppliers tend to make more competitive offers in private talks than in public tender," a local feed maker said.

For example, Chinese corn, is available at $110 per tonne FOB in the Korean markets in private talks, traders said, adding that publicly it was quoted five dollars higher at $115 per tonne FOB. South Korea, which produced almost 16 million tonnes of compound feed last year, imported about seven million tonnes of corn for feed, mostly from China. Details of South Korea's grain deals used to be available to the market immediately after a deal was signed as most importers bought in public tenders, unlike in other East Asian countries. Now, only the Korea Feed Association (KFA) members in Inchon import grains for feed through tenders, while other feed makers groups strike deals behind closed doors.