Japan Doubles Corn Purchases From Europe as U.S. Substitute
Japan, the world’s largest corn importer, doubled grain purchases from Europe in the past two months, heading for a record volume from the region this year, as local feed mills seek cheaper alternatives to U.S. supply.
Corn purchases by Japanese trading companies from the Black Sea region including Ukraine, Romania and Hungary topped 1.5 million metric tons for shipments from November to March, saidNobuyuki Chino, president of Continental Rice Corp. in Tokyo. Imports may increase further unless corn from Argentina and Brazil, which normally compete with U.S. grain for sales to the Asian market, becomes cheaper, he said in an interview.
Reduced exports from the U.S. may curb a recovery in Chicago futures, which have rebounded 13 percent from the lowest level in more than two months on Dec. 15. Japan, which depends almost all its corn on imports and sourced about 90 percent of its needs in 2010 from the U.S., the biggest shipper, is diversifying supply sources after a drought last year hurt the American crop and drove annual prices to an all-time high.
“European shippers offered corn to Japanese buyers at prices more than $20 a ton cheaper than the U.S. They are taking advantage of depreciating currencies against the U.S. dollar,”Kazuhiko Saito, an analyst at commodity broker Fujitomi Co in Tokyo, said today by phone.
Chino, who has traded grains for three decades and worked for Continental Grain Co. of the U.S. before establishing his company in 1999, declined to identify the Japanese trading houses as the information is not public. The companies bought 800,000 tons of corn from Ukraine by November as the European nation removed a tax on exports in October.
European corn became more competitive against U.S. grains as their currencies slumped amid the region’s sovereign-debt crisis. European corn imports by Japan exceeding 1.5 million tons would be the most ever, said Ippei Araki, an official at the livestock production and feed division of the Ministry of Agriculture, Forestry and Fisheries.
Japan imported 10.8 million tons of corn for feed last fiscal year, of which 9.5 million or 88 percent was from the U.S., according to data from the ministry. Argentina was the second-largest supplier with 690,000 tons, followed by Brazil with 434,000 tons. The nation also imports about 4 million tons of corn a year for food and other purposes.
The euro was 0.4 percent from a 16-month low against the dollar on speculation European Central Bank policy makers meeting today won’t take steps to support growth even as reports signal a struggling euro-area recovery.
The euro traded at $1.2715 as of 3:53 p.m. in Tokyo from $1.2707 yesterday in New York, when it slid to as low as $1.2662, the weakest level since September 2010. Hungary’s forint fell to a record low against the euro last week.
Japan’s livestock industry is increasing efforts to cut raw-material costs as it struggles to recover from the March 11 earthquake and Fukushima nuclear disaster, which destroyed feed plants and tainted beef and milk with radioactive cesium.
Why Spencer Ogden
We’ve won awards for what we do
Proactive, professional and passionate about recruitment is how we do it. Our Graduate Academy is an intensive training ground for the world’s top graduates. Thanks to the know-how of leading managers and directors, we turn them into the best recruitment professionals in the industry.Join our team