The worst U.S. drought in more than half a century will spur Japan, the biggest corn importer, to seek a record amount from Brazil after futures rallied to an all-time high, boosting costs for feed makers and meat producers.
Importers have purchased about 850,000 metric tons so far this year from Brazil, said Nobuyuki Chino, president of Continental Rice Corp. in Tokyo.
Imports from the South American nation may top 1 million tons this year, surpassing last year’s 887,861 tons, as shippers are offering the grain at prices more than $20 a ton cheaper than the U.S., he said.
Corn in Chicago climbed to a record $8.205 a bushel on Tuesday, surging 62 percent from June 15, as drought scorched crops in the U.S., the world’s top exporter of corn, triggering concern that global food costs will gain.
The U.S. Department of Agriculture cut its forecast for the corn harvest by 12 percent last month, and Goldman Sachs Group Inc. and Rabobank International have said they expect output to drop further.
“Brazil’s corn-export capacity has increased as the debt crisis and economic slump in Europe reduced the region’s demand for chicken imports, cutting corn consumption by Brazil’s feed industry,” said Kazuhiko Saito, an analyst at commodity broker Fujitomi Co.
“Corn shipments from Brazil to Asia are rising as users seek cheaper alternatives to U.S. corn,” he said.