Japan has booked at least 500,000 metric tons of corn for January-to-June shipment, more than 10 times the volume bought in 2009
As you can see there will be more corn for ethanol in the US this year...
U.S. Corn Concerns Spur Japan to Boost Brazil Imports
February 18, 2010, 01:43 AM EST
By Aya Takada
Feb. 18 (Bloomberg) -- Japan, the world’s largest corn importer, is increasing purchases from Argentina and Brazil on concern that U.S. crop quality from the past harvest declined, the head of a grain-trading company said.
Japan has booked at least 500,000 metric tons of corn from Brazil for January-to-June shipment, more than 10 times the volume bought in 2009, said Nobuyuki Chino, president of Unipac Grain Ltd. in Tokyo. The country has also bought about 100,000 tons from Argentina, close to last year’s total, he said.
The shift to South American supplies may accelerate a 10 percent slump in Chicago futures this year after a record harvest in the U.S. The country, the world’s largest exporter, supplied 96 percent of Japan’s overseas corn purchases in 2009.
“Japan’s corn imports from the South American countries may reach 1.2 million tons this year if their prices are competitive with the U.S.,” Chino said in an interview yesterday. A drop in U.S. crop protein levels was making it difficult for feed makers to meet government-set quality standards, causing buyers to seek alternatives, he said.
Japanese buyers are also concerned that U.S. supplies may be contaminated with deoxynivalenol, a harmful mycotoxin produced by fusarium molds, said Chino, who has traded grains for three decades and worked for Continental Grain Co. of the U.S. before establishing his company in 1999.
Corn for May delivery on the Chicago Board of Trade traded unchanged at $3.7175 a bushel at 3:21 p.m. in Tokyo.
Fertilizer Cut
“U.S. growers cut the use of fertilizer last year as its costs stayed high and corn prices declined, leading to lower protein content in corn,” said Akihiko Hirasawa, senior economist at the food and agriculture studies department of Norinchukin Research Institute Co. in Tokyo. Mycotoxin issues occurred because of wet weather, he added.
The U.S. Grains Council was aware of Japan’s concerns and was in contact with importers and end-users, said Tetsuo Hamamoto, Japan director of the export promotion group. Mycotoxin had been found in some parts of the eastern corn belt, while neither the council nor the USDA collected protein data, he said.
“We’d like to maintain the U.S. share in Japan’s corn market at a high level,” he said.
The U.S. was the world’s biggest corn exporter ahead of Argentina, Brazil and Ukraine in 2008-2009, according to the U.S. Department of Agriculture.
Feed Standards
Japan’s feed production standards are set by the Ministry of Agriculture, Forestry and Fisheries. A minimum protein content of 18.5 percent is endorsed for chick feed, said Yuichi Taguchi at the ministry’s animal products safety division.
The ministry set the tolerable level of deoxynivalenol, also known as vomitoxin, at 1 part per million in feed for most livestock, Taguchi said. The toxin causes feed refusal, weight loss and reduced production.
South American exporters were also benefiting from the shift to alternative suppliers as Ukraine corn prices had increased after the crop declined and demand from European and African consumers rose, Chino said.
Ukraine’s grain harvest fell 14 percent in 2009 as yields dropped after a record crop, the state statistics office said Jan. 15. Corn exports are forecast to slump 9 percent to 5 million tons in 2009-2010, according to the USDA.
Japan imported 11 million tons of feed corn last year, data from the Ministry of Finance show. The U.S. supplied 10.6 million tons, or 96 percent of the total, while Ukraine shipped 212,458 tons. Japan also imported 5.3 million tons of corn for food and other uses last year. Total purchases from Argentina and Brazil were 112,679 tons and 46,702 tons respectively.
--Editor: Wendy Pugh
To contact the reporter on this story: Aya Takada in Tokyo +81-3-3201-8461 +81-3-3201-8461 or atakada2@bloomberg.net
To contact the editor responsible for this story: Wendy Pugh +61-3-9228-8736 +61-3-9228-8736 or jpoole4@bloomberg.net |
