China orders 600,000 metric tons of corn from Ukraine, snubs U.S. supplies
BEIJING -- China, the world's second largest corn consumer, has booked over 600,000 metric tons of corn from Ukraine so far this year and more deals are expected as Beijing's stockpile dries up supplies and boosts prices at domestic market, trade...
BEIJING -- China, the world's second largest corn consumer, has booked over 600,000 metric tons of corn from Ukraine so far this year and more deals are expected as Beijing's stockpile dries up supplies and boosts prices at domestic market, traders say.
Some of the Ukraine cargoes for April-May shipment were struck at about 1,500 yuan ($240) per metric tons, including cost and freight, says one buyer. The price is about 60 percent lower than domestic corn quoted at 2,490 yuan per metric ton in the major port of Shenzhen.
"Some mills expect to get import quotas by the end of this month or next month," the trader says.
The government will issue quotas to mills based on the volume they bought at a special grain auction early in the year.
Beijing's stockpile has tightened domestic supplies and domestic corn prices rose more than 100 yuan ($16) per metric ton in the past two weeks, traders say.
Ukraine plans to send a delegation to China next month in a bid to negotiate a new deal which could include a doubling in corn exports after the country successfully completed shipments under a loan-for grain deal signed in 2012, its agriculture minister says.
Ukraine became the China's largest corn exporter in January and shipped 470,047 metric tons in the month, surpassing the U.S., the world's top exporter, according to official customs data.
Chinese buyers have so far shown little interest in U.S. corn, after U.S suppliers asked buyers to bear costs from potential risks from imports of genetically-modified corn.
"Suppliers have revised the contract item, that's the reason," says another trading manager with a state-owned trading house, when asking why buyers have not booked U.S. corn which has prices more competitive than Ukraine corn.
The first trader says feed mills are worried that Beijing may turn away U.S. cargoes again after more U.S grain elevators accept GMO corn containing Syngenta AG's Agrisure Duracade trait which has not yet been approved by China.
China has cleared imports of Syngenta's MIR 162, the strain at the centre of a string of lawsuits over U.S. grain shipments after Beijing's rejections last year cost the U.S. agriculture industry up to $2.9 billion.