SE Asian corn prices under supply pressure

SE Asian corn prices under supply pressure

BANGKOK (Reuter): Domestic corn prices in Thailand and Indonesia are likely to be under supply pressure from imports and local harvests over the next week, traders in both countries said.

Flour prices in Malaysia, however, remain firm following a government-sanctioned rise in prices by 30 cents to 1.10 ringgit (44 U.S. cents) a kg last week. Malaysian millers had been squeezed by high imported wheat prices which touched US$280 a ton in May from $222.95 in January

In Thailand, two shipments of corn totaling 130,000 tons, bought by Thai feed mills from Continental Grain for around $195- $197 C&F a ton, have arrived in the country. A third shipment of 30,000 tons was due to arrive from Argentina by the end of June, a Thai trader said.

Asked why domestic corn prices were seen heading south, the trader said: "The first reason is the arrival of the imports and the second is that the new crop is almost ready for harvest."

The Thai domestic maize/corn price paid by feed producers eased to an average 330 baht/60 kg compared with 336 baht/60 kg last week, traders said.

In Indonesia, corn was quoted unchanged from last week at around Rp 600/kg in Jakarta, traders said.

"Feedmills have been very passive in the past week," one Indonesian trader said. "Unless they really needed supplies, they were out of the market waiting for the harvests."

Corn imports from Vietnam were entering the country, but there were no immediate details, the trader added.

Indonesian corn will be harvested from the key growing regions of East Java and Lampung in South Sumatra. The two regions usually yield about 400,000 tons of corn per harvest.

One trader said the harvests in Lampung could be affected by bad weather, but the report could not be confirmed.

"I heard the weather has not been favorable and that the size of the crop could be smaller," the trader said. "By how much lower, I really don't know."

In Malaysia, the increase in domestic flour prices to reverse a shortage in supply led some traders to estimate that the country could soon import up to a 100,000 tons of wheat.

"We'll get some relief from the increase but it won't be a windfall," said the purchasing official of a Malaysian flour mill. "Our production will still depend on how much wheat we buy and the price we get."

"It's important to remember that no one's going to rush and buy this quantity of wheat. The mills need the wheat but prices are still high and they will buy according to their schedule," a mill spokesman added.

For the current week, "A" grade wheat in bags was priced at around 970 ringgit a ton, while low grade wheat in bags was around 650-700 ringgit, both ex factory/godown central region, industry sources said.

Corn was quoted at 580-590 ringgit a ton in bulk ex factory/godown in the central region, the sources added.

Soymeal prices in Thailand and Indonesia have eased this week, but were reported mixed in Malaysia.

Imported soymeal in Malaysia was steady at 770 ringgit a ton in bags ex-factory/godown central region, but local material was up slightly to 785 ringgit from 780 last week.

In Indonesia, soymeal eased to Rp 770-780/kg from Rp 800 a week ago, traders said.

Soymeal prices in Thailand fell to an average of 9.60 baht/kg on Tuesday compared with 9.80 baht/kg last week. The lower prices were attributed to Thai meat producing associations importing low-priced Indian soymeal, one trader said.

"I think (soymeal) prices will still come down, maybe another 20 or 30 satang (0.2-0.3 baht) by next week," he said.