November 12, 2003

USGC Welcomes South Korea's Substantial Purchase of US Corn
 

The United States Grains Council is pleased to learn South Korea purchased a substantial U.S. corn shipment this week.

"It is definitely a good sign. This is what we had been predicting and hoping for," said Mike Callahan, the Council's director of international operations for Asia. "The South Koreans are beginning to see that the Chinese corn prices are increasing and that a number of Chinese contracts are not being filled."

South Korea's Major Feedmills Group reportedly made the 52,500 metric ton (2,066,820 bushels) purchase. South Korea imports about 8 million tons of corn annually and, until about four years ago, most of that corn was imported from the United States. In recent years, however, the South Koreans have favored cheaper China corn, which costs $20-$50 per ton cheaper than U.S. corn.

"With Chinese prices beginning to rise, this presents an opportunity to gain back lost market share," Callahan said.

Chinese corn, however, is still quoted below $150 per ton delivered to the Korean market, while U.S. corn is much higher than $150 per ton, according to Reuters. South Korean feed makers groups are still looking for Panamax-size cargoes for February/March arrival and aiming for cheap Chinese origin. But market speculation has been mounting that China would halt corn exports from January 2004 in an effort to cool rising domestic prices.