HAMBURG, Dec 11 (Reuters) – Large volumes of U.S. corn rejected by China in a dispute about unapproved genetically-modified organisms (GMO) are being rapidly switched to other Asian importers, sometimes with price cuts, European traders said on Wednesday.
“Sellers are switching the destination of the rejected U.S. corn to other Asian countries and some deals have taken place at discounts to current market prices,” one trader said.
The trader added that previous purchases of corn from other origins made by Asian importers were being switched to the U.S. corn rejected by China. The rejected corn is also being directly offered for sale in Asia by U.S. exporters.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
The huge Korean grain importers have been concentrating on the offers of U.S. corn rejected by China rather than issuing international tenders this week, traders said.
Since mid-November, quarantine authorities in China, the world’s second largest corn consumer, have turned away about 239,100 tonnes of the grain from the U.S.
The latest cargo in the total was denied entry on Tuesday after quarantine officials in Zhejiang detected MIR 162, a GMO strain not yet approved for import by China.
Some of the rejected corn has been taken by South Korean importers who agreed to take early delivery of corn or change the origin to the United States, traders said.
Traders said South Korea’s Major Feedmill Group (MFG) has agreed to take earlier delivery of U.S. corn previously bought from Cargill after being offered price cuts.
A contract for 63,000 tonnes of U.S. corn bought at $245.80 a tonne c&f for arrival by Mar. 30, 2014, now changes to December 2013 arrival with a $6 discount on the original price, traders said.
Another contract for 63,000 tonnes of U.S. corn bought by the MFG at $239.99 a tonne c&f from Cargill for Apr. 25, 2014, arrival changes to January 2014 arrival with a $6 discount.
“The MFG calculated $2 a tonne of additional of storage and financial costs for every month on the early delivery,” one trader said.
A purchase by the Korea Feed Association (KFA) Inchon section of 69,000 tonnes of South American corn at $242.70 a tonne c&f for arrival by Jan. 15, 2014, changes to U.S. corn for arrival in Dec. 2013.
The KFA has a 50 cent a tonne discount on the original price, traders said.
A purchase of 65,000 tonnes of Black Sea corn bought by Korea’s largest feedmaker NOFI from Dreyfus at $234.90 a tonne c&f for Jan. 5, 2014, arrival changes to U.S. corn for December 2013 arrival with no price discount.
“More transfers or direct purchases of corn rejected by China are now being discussed by at least four major multi-national trading houses for arrival up to February 2014 in Korea,” another trader said. “I hear the same is happening in other countries such as Japan and Vietnam.”
The early arrival of corn in South Korea between December and February is likely to reduce the number of international tenders from the country seeking corn for May to June 2014 arrival, traders said.
