October 2, 2007

 

Asian feed millers shun wheat in favour of corn

 

 

Feed mills in Asia are increasingly switching to other grains such as corn as wheat becomes prohibitively expensive, industry executives said.

 

Wheat prices continued to rise in Asian trading last week as it reached an all-time high at the Chicago Board of Trade due to further damage to the Australian crop amid the ongoing drought. Russia's decision to impose a 10 percent tax on wheat exports, starting November, also boosted prices.

 

Wheat prices further came in upward movement after talk of thinning supply from other sources such as Ukraine and a series of buy tenders from key consumers such as Algeria, Morocco, Jordan, Pakistan and Iraq have.

 

In South Korea, feed wheat usage may drop to 500,000 tonnes this year, compared with 700,000 tonnes last year, as many mills can't afford the current high prices of around US$430 to US$450/tonne for feed wheat, industry analysts said.

 

Gold Coin Mills, one of Malaysia's largest feed milling companies, has stopped using feed wheat completely while other Malaysian companies are cutting back on the use of wheat in feed.