HAMBURG, Dec 17 (Reuters) – South Korean importers on Tuesday agreed to accept early delivery of 195,000 tonnes of corn from the United States as speculation China will reject more U.S. shipments continues to disrupt trading patterns, European traders said.
“The affected cargoes were not actually rejected by China but exporters are now taking extra precautions,” one European trader said.
Shipment delivery changes were agreed with price reductions and with some cuts in consignment sizes, traders said, potentially affecting hundreds of thousands of tonnes of U.S. corn sold to China, part of which is already afloat.
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At least three shiploads of U.S. corn have been rejected by China’s quarantine authority in the past month on the grounds that they included an unapproved variety with genetically modified organisms (GMOs) produced by Syngenta AG known as MIR 162.
U.S. officials are monitoring Chinese rejections of American corn shipments, which have helped drive down corn prices, and have urged China to act promptly to approve genetically-modified strains of grain, the U.S. Trade Representative’s office said.
“Korean importers on Tuesday agreed to accept early delivery of 195,000 tonnes of U.S.-origin corn showing that the uncertainty about whether China will reject more shipments continues to disrupt trading patterns,” one European trader said.
Traders had said last week that U.S. exporters were diverting corn shipments already at sea and also those scheduled to take place in coming months to other countries because of fears China may reject them.
China’s strict checks for unapproved GMO material are an attempt to curb cheap imports and support domestic corn prices in the wake of a bumper domestic harvest, industry sources said on Friday.
Of the deals done on Tuesday, traders said a shipment of 70,000 tonnes of U.S. corn scheduled for delivery by Mar. 15, 2014, to giant South Korean importer NOFI will now arrive in January 2014.
The shipment will be reduced to 65,000 tonnes and the original price cut by $12.90 a tonne to $233.00 a tonne c&f.
Another shipment of 70,000 tonnes of U.S. corn originally bought by NOFI for arrival by Mar. 25, 2014, will now arrive after Feb. 5, 2014.
The consignment has been reduced to 65,000 tonnes and the original price cut by $16 a tonne to $229.90 a tonne c&f, traders said.
South Korea’s Major Feedmill Group (MFG) has also agreed that a 65,000 tonne shipment of U.S. corn bought for arrival by Feb. 1, 2014, will now arrive in January 2014.
The consignment size is not reduced but the original price is cut by $6 a tonne to $228.49 a tonne c&f, traders said.
Meanwhile, the Korea Feed Association (KFA) bought 65,000 tonnes of corn to be sourced from the United States in a deal on Tuesday also related to the Chinese issue, European traders said.
The KFA also agreed to a request for delivery of 70,000 tonnes of U.S. corn be changed from arrival by May 15, 2014, to June 15, 2014 but with the same price of $242.10 a tonne c&f and no reduction in tonnage, traders said.
“U.S. sellers are trying to switch destinations before their ships get into China in an attempt to avoid predictable risks,” one European trader said. “These include vessels now sailing and vessels to be loaded in forthcoming months.”
Traders said more U.S. corn is being offered to South Korea but the lack of storage space is likely to make it difficult for the country to accept additional tonnages in January.
