SE Asian buyers seek 350,000 tons of corn
SE Asian buyers seek 350,000 tons of corn
SINGAPORE (Reuter): Southeast Asian buyers are believed to be seeking 350,000 tons of corn with Indonesia inquiring for 200,000 tons and Thai buyers awaiting government approval to purchase 150,000 tons, traders said yesterday.
The Indonesians are worried that a severe drought, which some believe is linked to the El Nino weather phenomenon, may sharply trim the October/December corn harvest in Java.
"I think the Indonesians are looking around and a safe figure would be 200,000 tons," a dealer said.
"People are saying it's quite bad on Java. I think the El Nino is affecting them. They will need at least 200,000 tons," another dealer said.
The 200,000 tons would be on top of 150,000 tons of mostly Chinese origin corn scheduled to arrive in Indonesia by mid- August and 100,000 tons currently being discharged in the country, dealers said.
"You have to remember that 200,000 is a conservative figure. It could easily go much higher," a trader said.
"From the way the Indonesians are buying corn lately, we can sense something is wrong with the crop," a European dealer said.
The El Nino, caused by rising water temperatures in the Pacific Ocean off the western coast of South America, can disrupt global weather patterns with disastrous consequences.
The weather anomaly is named after the Christ child by Peruvian fishermen because it normally peaks in December around Christmas.
The most severe El Nino in recent memory in 1982-1983 caused widespread flooding and drought in more than 15 countries.
Recent steady corn futures prices on the Chicago Board of Trade (CBOT) have deterred the Indonesians from immediately buying corn.
The price of U.S. corn coming into Southeast Asia was quoted by the trade at around $133-$136 a ton C&F, almost unchanged from last week.
Regional traders said they also waiting for the Thai government to approve an industry request to allow the tariff- free importation of 150,000 tons of corn.
"People say they need the corn, but when will they (the government) come up with a decision is anybody's guess," one trader said.
The region's currency problems, caused by weeks of speculative attacks that began with the Thai baht and which recently hit the Indonesian rupiah, may cause some temporary delays in purchases, dealers said.
"It's affected buyers here slightly. But if they have to buy, they'll buy," a trader said.
Regional dealers also estimate that Indonesia still has open positions for 50,000 tons of soymeal for October shipment while Thailand and Malaysia may pick up between 20,000-30,000 tons of meal each for the same shipment period.
For the meantime, however, Malaysia is expected to stay out of the grains and oilseeds market.
"The Malaysians have too much of everything and the cargo is just sitting there," a dealer said.