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Japan to keep buying US corn

TOKYO: Japanese traders have cautiously welcomed China's lifting of its sixteen-month corn export ban, but are unlikely to turn their back on the United States for future corn shipments, traders said on Wednesday.

"If China has indeed lifted its corn export ban, it's definitely good news for us. But we're going to keep buying U.S. corn for the October to December shipment, although Chinese origin sounds much cheaper," a Tokyo-based trader said.

China has approved the export of 1.5 million tonnes of corn to South Korea and Japan, a trader involved in the sale said on Tuesday. Exports of corn, at $175-180 per tonne, would begin in May for shipment to Japanese and South Korean ports, he said.

Exports of Chinese corn have been banned since December 1994. After the ban, Asian traders had to rush to buy U.S. corn to offset the loss of Chinese grain, a major source for feed makers in Japan and South Korea, industry officials said.

Japan imported 16.359 million tonnes of corn in 1995, with almost all of that, or 16.036 million tonnes, coming from the United States, Finance Ministry data showed.

Japanese traders have already finished buying U.S. corn for July to September shipment, which is much earlier than usual, and are now stepping up buying for the October to December period.

"They accelerated corn buying from last Friday. Some traders overbought U.S. corn, but I think they'll keep buying later this year," said a senior official at a major feed maker.

Industry officials said Japanese traders were likely to remain cautious as they were burned once before when the Chinese failed to deliver corn promised for the fourth quarter of 1994.

"They still have an obligation to deliver 200,000 to 300,000 tonnes of corn to Japan. We can't trust Chinese exporters unless they settle this problem," said a trader, who asked not to be identified.

Japanese traders are not eager to buy corn from Latin American producers, least of all from Argentina, because of higher export prices.

"We usually buy Argentina maize for August and September shipment. But current export prices of Argentina maize are higher and we are less interested," another trader said.-Reuter