November 7, 2003

US Exporters to Benefit from Rise in China Corn Prices
 

A recent rise in Chinese corn prices may create more opportunity for U.S. exporters.

For example, prices in the southern Chinese ports of Guangdong are reported at about $170 a metric ton, or higher. The price spike is attributed to tightening supplies and the desire to better cover demand in the deficit markets, according to reports by the Council's Beijing office.

"What this means to our members is that the supply of corn in China is tightening to some degree, with expectations of reductions in exports for the new marketing year versus last marketing year. Reduced exports will open opportunities for other corn exporters, including the U.S.," said Dr. Todd Meyer, senior director of the Council's Beijing office. "I suspect the prices will stabilize a bit below current prices and then we may see further upward price movement as the supply dwindles in some regions later in the marketing year."

Mike Callahan, the Council's director of international operations for Asia, also believes the rise in corn prices is good news for U.S. corn. "The high domestic prices now being reported by our office in China should make U.S. prices more attractive to importers and processors in south China," Callahan said. "I would imagine that Southeast Asian importers are getting very concerned about Chinese supply reliability. Our office in Malaysia reports that a number of them are taking a very close look at U.S. prices. Unfortunately, extraordinarily high ocean freight costs may work against us."