Southeast Asian corn imports seen up on El Nino drought
Southeast Asian corn imports seen up on El Nino drought
SINGAPORE (Reuter): Southeast Asian animal feed buyers may
have to import large additional quantities of corn for the fourth
quarter as drought linked to the El Nino weather anomaly bites
into domestic crops, traders said yesterday.
At the same time buyers are facing much higher prices for the
staple as their currencies have sagged against the U.S. dollar,
in which most internationally traded commodities are priced, and
as benchmark U.S. corn futures tick upwards.
Indonesia in particular may have to import about 300,000
tons of corn, worth about $43 million at current prices, between
October and December as El Nino has hit the domestic crop hard.
But the gyrations in the rupiah, following the currency's
recent sharp fall against the dollar after speculative attacks,
will stop importers immediately booking their orders as they wait
for the foreign exchange situation to stabilize.
"It's a tough call, but I think 300,000 tons is a reasonable
figure," a dealer for a foreign trading house said.
"They might delay buying though until the rupiah settles down.
They have to sort out their exchange rate problem first," another
senior trader told Reuters.
A dealer for a U.S. commodity house said various analysts and
traders have calculated that Indonesian feedmills will buy
anywhere from 200,000 to 500,000 tons of corn for the later part
of the year to make up the shortfall in the local crop.
"Some guys put the number at half a million, but I don't think
anybody in the trade believes that," he said. "Three hundred
thousand (tons) is just about right."
The 300,000 tons would be on top of the estimated 400,000 to
450,000 tons arriving in September, mostly from China.
But Indonesian importers are stymied by the speculative
attacks on the rupiah and other currencies in the region.
"Everybody's talking about the currencies. It's not that the
Indonesians don't want to buy. They can't do anything now with
the rupiah bouncing all over the place," a dealer said.
The rupiah's fall against the U.S. dollar in the past few
weeks has driven up the cost of corn imports and boosted domestic
corn prices by around 20 percent, the dealers said.
Malaysia is in the same fix as Indonesia, with a sliding
ringgit complicating the situation for its feedmills.
"They should have open positions in the last three months for
about 150,000 tons of corn. But they also have to contend with
the weak ringgit," a trader said.
Thailand, on the other hand, has nearly completed its duty-
free importation of 150,000 tons of corn and will not need
supplies anytime soon.
Dealers agreed that the key corn crop on Java in Indonesia has
been hammered badly by a spreading drought stemming from the El
Nino weather phenomenon.