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Malaysia grains: Corn price surges on stock squeeze

KUALA LUMPUR: Malaysian corn prices have surged as the market fears a squeeze in supply due to late arrival of Chinese cargo, industry sources said on Wednesday.

Maize out of Port Klang, Malaysia's main port, was quoted 20 ringgit ($5.26) higher a tonne, ex-warehouse, at 435 to 430 ringgit, against 415 to 420 ringgit a week ago, dealers said.

They said about 100,000 to 150,000 tonnes of corn bound for Malaysia was stuck in China because poor weather had delayed delivery to ports there.

A senior executive of a local flour mill said there were only about 30,000 tonnes of corn in Port Klang, down from 40,000 a week ago. "The trade is usually comfortable with a higher stock."

He said some consumers were getting edgy as there was no certainty on when fresh supplies would arrive.

"China has not been telling us the whole truth," said the official. "The market is a little short now but it could get a lot more edgy in a few days time if we don't know the sailing time of the new cargo."

Corn is Malaysia's most popular feedstock grain and is staple diet for chickens and pigs, the main sources of protein for the country. About 150,000 tonnes of corn is imported monthly.

Malaysia used to import more than three million tonnes of corn a year, or 250,000 tonnes a month, before last year's outbreak of a viral epidemic that led to the culling of more than one million pigs. The epidemic ended last May.

A trader said there was no news of any South American corn -- traditionally the first choice in the Malaysian market -- coming in to ease the shortage.

"Some early birds have anticipated a corn shortage so they've started buying whatever stock is available in the market," he said.

The flour mill executive said the 30,000 tonnes stocked in Port Klang seemed inadequate, but some private millers had more supply in their own warehouses.

"We don't know how much they are holding, but the big boys normally have enough to last for a month," he said.

Dealers said soymeal -- another important feedstock used in the hog-rearing industry -- was adequate, with about 11,000 tonnes arriving from India last week.

Malaysia imports about 50,000 tonnes of soymeal a month. Traders said there were about 30,000 tonnes stocked at Port Klang.

Indian soymeal was quoted on Wednesday at 710 ringgit a tonne, unchanged from a week ago.

Argentine soymeal was priced at 720 ringgit and local soymeal at 730, also unchanged from last week.

Traders said buying patterns would not change much ahead of the Chinese Lunar New Year festival in early February. The festival normally sees an increase of between 10 and 20 percent in chicken and pork consumption.-Reuters