Grain market Japanese imports forecasted to increase to a record 1.07 million tonnes
TOKYO, Japan (Reuters) — Japan has raised its target for annual feed wheat imports by 20 percent.
The move could weigh on U.S. corn prices as animal feed makers in the world’s biggest corn importer continue to shift to cheaper alternatives.
A farm ministry official said wheat feed imports were forecast to rise to 1.07 million tonnes in the year to March 2014, following record purchases of 900,000 tonnes last year to meet the increasing demand.
Ikuho Tomita said animal feed producers continue to take advantage of lower import costs of wheat compared with corn, traditionally the main ingredient to feed chickens, cattle and swine in Japan.
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Analysts said a reduction in corn purchases by Japan, the biggest customer of U.S. corn, could weigh on the Chicago corn market. It reached three-month highs earlier this month after the U.S. Department of Agriculture pegged corn end-of-season stocks for the 2012-13 year at a 17-year low.
“The ratio of wheat in animal feed has risen since 2011-12 and stays above four percent nowadays, and we’ve decided not to intervene in this trend,” Tomita said.
Tokyo controls imports of wheat, the second most important grain after rice, to protect domestic farmers and insulate consumers from volatile markets.
Japan’s wheat production satisfies only 10 percent of domestic demand.
The ministry sets an annual purchase target for feed wheat and feed barley in March as a guideline for suppliers of the maximum amount it plans to buy in the following year, based on its hearings with domestic users.
