Grain importers trying to cut dependence on drought-hit U.S. Midwest


Amid the prolonged drought in the U.S. Midwest grain belt, Japanese traders are stepping up moves to diversify supply sources to reduce their heavy dependence on U.S. corn and soybeans.

In 2011, Japan imported 15 million tons of corn, a key ingredient for mixed feed, and 2.8 million tons of soybeans, used mostly for cooking oil. The U.S. accounted for 90 percent of the corn and 65 percent of the soybeans. But now that the export capacity of the U.S. gain belt has drastically declined due to the drought, Japanese importers are looking to South America, Europe and Africa as stable supply sources.

The importers initiated serious efforts to reduce their dependence on U.S. crops after world food prices spiked in 2007-2008.

Last January, Mitsubishi Corp. obtained a 20 percent stake in Brazilian grain trader Los Grobo Ceagro do Brasil SA. This resulted in a substantial increase in the company’s shipments of soybeans and other crops from Brazil.

Major trader Mitsui & Co. made Multigrain AG, a Swiss firm producing and distributing grains in Brazil, its wholly owned subsidiary in May 2011.

The National Federation of Agricultural Co-operative Associations, or Zen-Noh, has been expanding its network for maize procurement in South Africa. Also in Africa, Itochu Corp. is part of an effort to produce soybeans in Mozambique.