September 29, 2008

   

Japan's corn imports to accelerate as prices cool
   

 

Japan, the world's top corn importer, will accelerate its grain purchases in the rest of the year to offset a sharp slowdown in bookings after wild spirals in prices and freight costs scared off buyers.

 

Japan, which has bought 22 percent less corn for the last quarter of 2008 versus a year ago, has so far contracted for around 2.8 million tonnes of corn.

 

Japan imports most of its annual corn needs of around 16 million tonnes, mainly from the US. It usually buys 3 or 4 months in advance but due to price fluctuations in markets, there is some delay this year, traders said.

 

US corn futures have lost around 28 percent since hitting a record high of US$7.65 per bushel at the end of June.

 

Traders said the volatile freight market was also responsible for the slowdown in Japanese buying.

 

Bulk ocean freight rates from New Orleans to Japan have slipped to around US$80 per tonne from around US$110 per tonne in July.

 

Japan's corn imports of 9.4 million tonnes in the first 7 months of 2008 were marginally lower from a year ago, customs data show.

 

Traders expect crop prices to decline further as harvests begin in the next few weeks. "The November soy contract could come down to US$11.60 a bushel next week and corn is likely to creep down to US$5.40," said Kaname Gokon, deputy general manager with trading company Okato Shoji Co. in Tokyo.

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