Japan, the world’s largest corn buyer, doubled grain purchases from Europe in the past two months, heading for a record volume from the region this year, as local feed mills seek cheaper alternatives to the U.S. supply.
Corn purchases by Japanese trading companies from the Black Sea region including Ukraine, Romania and Hungary topped 1.5 million metric tons for shipments from November to March, said Nobuyuki Chino, president of Continental Rice Corp. in Tokyo.
Imports may increase further unless corn from Argentina and Brazil, which normally compete with U.S. grain for sales to the Asian market, becomes cheaper, he said in an interview.
Reduced shipments from the U.S. may curb a recovery in Chicago prices, which have rebounded 13 percent from the lowest level in more than two months on Dec. 15. Japan, which sourced almost 90 percent of its corn in 2010 from the U.S., is diversifying supply sources after a drought last year hurt the American crop and drove annual prices to an all-time high.
“European shippers offered corn to Japanese buyers at prices more than $20 a ton cheaper than the U.S. They are taking advantage of depreciating currencies against the U.S. dollar,” said Kazuhiko Saito, an analyst at commodity broker Fujitomi Co.
Chino, who has traded grains for three decades and worked for Continental Grain Co. of the U.S. before establishing his company in 1999, declined to identify the Japanese trading houses as the information is not public. The companies bought 800,000 tons of corn from Ukraine by November after the European nation removed a tax on exports in October.