Cheap RI corn hurts Malaysia's grains trade

Cheap RI corn hurts Malaysia's grains trade

KUALA LUMPUR (Reuters): Trading of imported feed grains in
Malaysia was lifeless yesterday as livestock farmers limited
their buying to absolute essentials due to tight liquidity,
industry sources said.

The market was further hurt by cheap Indonesian corn, which
continued to arrive in unknown quantities on barges run by barter
traders.

Corn is the most widely consumed imported feed grain in
Malaysia.

"The arrival of maize from Indonesia is almost as difficult to
estimate as the arrival of illegal immigrants on our shores,"
said the sales manager for grains at a local flour mill.

Trade sources said the stockpile of Chinese and Argentine corn
at Malaysia's central Port Klang had grown to almost 100,000
tons this week, from an estimated 80,000 a week ago.

"It's a known fact that livestock farmers are buying feed from
hand-to-mouth now because of the tight cash situation," said a
trader. "But we're not entirely sure whether the higher stocks
are because of this or because they're buying Indonesian corn."

Maize from Indonesia could be obtained in Malaysia between 300
and 400 ringgit ($79 and $106) a ton, grains traders in the
capital said.

They said this was a huge discount compared with the 500
ringgit a ton C and F for Chinese maize out of Port Klang.
Argentine corn out of the same port was priced at 510 ringgit a
ton C and F.

Traders said it was not possible to reduce rates of corn from
other origins to compete with Indonesian maize.

"We're fighting with barter traders who will give as much
discount as possible to undercut the real market," said one
trader. "If we put our prices at 300 ringgit, they'll sell at
250."

The traders said although Indonesian maize was inferior in
quality to Chinese and Indonesian corn, pricing was what mattered
to farmers now.

"Anyway, the pigs and chickens aren't complaining that the
food is bad, so as long as there is adequate feed, the farmers
are happy," said another trader.

Indonesian corn started arriving on Malaysian shores two weeks
ago after Jakarta said it will export most of its maize this year
due to tumbling meat consumption and livestock production.

Indonesia, which expects to produce about 8.3 million tons of
corn this year, said markets for the exports included Malaysia
and Thailand.

Sales of imported feed grains in Malaysia languished after a
sharp fall in the value of the ringgit made the staple more
expensive for chicken and other livestock breeders since July
last year.

The ringgit is currently at about 3.78 to a dollar, down 33
percent from its 2.52 level last July.