Korea Makes `Very Rare' Purchases of South African Corn, Local Buyers Say
South Korea, the third-largest corn buyer, imported the grain from South Africa this year after U.S. prices surged, according to trade data and buyers.
Purchases of South African corn for feed production totaled about 161,000 metric tons from January through October from nil a year ago, data on the website of the Korea International Trade Association show. Total imports of feed-corn in the period were 5.53 million tons, with the U.S. supplying 92 percent, compared with 4.89 million tons a year ago, the data show.
“It’s very rare for South Korea to buy South African corn, maybe once in a blue moon,” said Lee Tae Woong, deputy general manager of the purchasing team at Nonghyup Feed Inc. “This year is an exception as African corn was cheaper than the U.S. grain on ample supplies after good harvests.”
Corn futures in Chicago have surged about 46 percent since July 1 as demand for the grain increased after global supplies of wheat shrunk because of adverse weather. Corn and wheat are both used as animal feeds and often substituted for each other.
Nonghyup Feed, the nation’s top feed-grain importer, bought 50,000 tons of African corn earlier this year, and has secured a further 100,000 tons since Oct. 1 for March and April next year, said Lee. The African grain was about $5 to $10 a ton cheaper than U.S. corn at the time the volumes were contracted, he said.
“If South African corn remains attractive in terms of prices, Korean buyers could buy more,” said Kim Chi Young, director in charge of purchases at the Korea Feed Association, South Korea’s biggest grain buyer. He didn’t say how much corn the group imported this year.
Asian Markets
South Korea bought 5.88 million tons of corn for producing feed last year from countries including the U.S., Brazil, Argentina and Ukraine, the trade data show.
South Africa’s government said Nov. 9 that the country should change the type of corn it plants to target markets in Asia and suggested setting up an agency to promote exports.
South Africa, the biggest producer on the continent, grows mainly white corn, locally known as maize. South Korean feed makers prefer yellow corn, Kim said.
Falling import prices for U.S. corn at the moment may dim the prospect of further large purchases from South Africa, Nonghyup’s Lee said. “A couple more cargoes may be possible, but it depends on prices,” he said.
Favorable weather conditions and increased use of genetically modified seed have resulted in bumper harvests and a surplus in South Africa. This year’s harvest is expected to be 13 million tons, the biggest since 1982.
South Africa has shipped 500,900 tons of corn to nine African countries as well as to Spain, Taiwan, Japan, Kuwait and South Korea in the marketing year that began May 1, according to the Pretoria-based South African Grain Information Service. That compares with 261,338 tons in the previous marketing year.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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