Chinese feedmiller buys Thai corn
Chinese feedmiller New Hope Group has bought several thousand tonnes of Thai corn in recent weeks in one of the country's first large purchases this year. Traders said it was unlikely more purchases will follow because of weakening domestic prices.
If China buys large quantities of corn it could ignite the global benchmark Chicago Board of Trade price. Since its June peak CBOT corn pricing has lost a quarter of its value on expectations of a bumper US crop.
China's largest feed mill, the New Hope Group, has imported corn from Thailand and will continue to buy corn globally if prices are attractive, Wang Hang, the firm's vice-president said.
Thai corn exporter Nanapan Agri-Industrial Co said it had sold 3,000 tonnes of corn to New Hope Group through a Japanese trading house at $205 a tonne, including cost and freight.
The import came as feed mills in southern China face tight supplies because of logistics problems in securing corn from Beijing's large stockpiles, located several thousands of miles away in the country's northeast.
China's self-sufficiency in corn is suddenly in doubt as a drought threatens to cut the harvest by as much as 10%.
Still, traders said China, which allows corn imports through quotas, is unlikely to open the gates to cheap US corn imports as the government holds large stocks.
Annual import quotas expire if not used by September and Beijing will have to reallocate quotas before anyone can import.
Traders don’t expect large purchases will take place for the next two to three years. China will manage its demand and supply situation rather than import US corn.
They will only buy Thai corn if it's cheaply available. Chinese mills are also reluctant to buy given the upcoming harvest.
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