Chinese Corn Exports Picking Up
Chinese corn exports are picking up as lower prices and higher freight rates restore a competitive edge in the Asian market against its rivals from Argentina and the United States, according to Reuters News Service.
Traders on Friday told Reuters China might be able to ship 300,000-400,000 metric tons of corn each month for total exports of about two million tons in the first half of 2005, up from just 2.32 million tons in the whole of 2004. Most of the exports are expected to go to South Korea.
Though the current lowest Chinese offer was about $123/ton ($3.12/bu.) on a free on board basis, prices might move down towards $120 in the near future, some traders said. Prices were at $130 in December, and fell to $126-$127 in January.
Provincial governments in northeast producing areas, such as Jilin province, were considering other support measures for the exports, such as waivers for railway construction taxes, following a record 2004 harvest of 132 million tons, traders said.
"Now Argentine corn is less competitive than a few weeks ago," said a trader in Shanghai. "I think some Chinese business has been done. Their sales so far this year might total more than one million tons."
The traders told Reuters Chinese corn exports were also helped by freight rates, which moved up about $10 in the past 10 days alone due to active grains sales by South America harvesting bumper crops, making its exports to nearby South Korea and other Asian markets more competitive than those from more distant South American suppliers.
“The (freights) market looks strong," said an official at one of the world's top shipping companies, in charge of dry bulk cargoes. "There are not enough vessels available in Brazil or Argentina from early March to about late March."
Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.