Japan, the world's largest corn buyer, may buy less of the grain as feed-wheat imports almost quadruple this year to their highest level since 2001, as livestock producers seek to cut costs, Bloomberg reports.
Feed-wheat imports may surge to 430,000 metric tons from 112,000 tons in the year ended March 31, said Ikuho Tomita, deputy director at the agriculture ministry’s feed supply and demand planning office. Imports were 473,000 tons in 2001.
Higher imports may stem a 25% decline in Chicago wheat futures this year as the United Nations expects the biggest-ever global harvest while Russia and Ukraine eased export restrictions, boosting supply.
Feed wheat was offered to Japanese buyers at about $50 a ton cheaper than US corn as shippers compete for sales, said Nobuyuki Chino, president of Continental Rice Corp. in Tokyo.
“Increased purchases of feed wheat means Japan’s corn imports will decline, as overall demand for feed grains isn’t growing,” Tomita said in Tokyo. Japan’s feed makers, recovering from damage caused by the March 11 earthquake and tsunami, “are taking advantage of an expanded gap in purchasing costs between corn and wheat.”
The agriculture ministry, which controls overseas purchases and domestic sales of wheat to stabilize supply, has approved feed makers to buy the grain beyond the government-set ceiling of 300,000 tons this fiscal year.
This will be the first breach of the limit in 48 years, as demand for corn substitution increased on a widening price gap, Tomita said in an interview. Japan imported 169,318 tons of feed wheat in the nine months ended Sept. 30, data from the finance ministry showed. Half was from Australia and half was from Canada.