China is likely to offer about 1.6 million to 1.8 million tonnes of corn for export in the second half of this year, and grain traders in Asia said on Monday they were expecting a decision soon.
Any fresh allocation of the grain by China would be a welcome sign for Asian markets, which have been scrambling for cheaper cargoes due a lack of supplies and high prices of US cargoes.
"We are hearing that China will have another 1.6 to 1.8 million tonnes of allocation," said one regional trader. China exported a record 16.4 million tonne of corn in 2003, making it the second-largest exporter, after the United States.
But it has sharply reduced offers this year as it struggles to rein in rising food prices amid eroding grain stocks. China had allocated 1.4 million tonnes of corn for export in the first half, most of which has been sold out.
Regional grain traders said China might be targeting the Japanese market for its planned exports since it can get a premium for its limited supplies.
But grain traders said buyers like South Korea and Malaysia, the two biggest customers of Chinese corn last year, might wait to see how China would price its offers.
"The price ideas we are getting for Chinese corn are around $175 FOB. I am not sure how China can sell corn at those prices," said one Singapore trader. "Argentine corn is dirt cheap now."
Regional traders said Argentine corn was offered at about $163 to $165 a tonne C&F to Southeast Asia for June/July shipments. In the January-April period, China exported 747,929 tonnes of corn to South Korea, 114,482 to Malaysia and 138,982 tonnes to Japan, Chinese customs figures show.
"South Korea might cover most of its optional-origin deals with Argentine corn," said one trader. "Malaysia has been buying quite of bit of Argentine corn in the past two months."
Argentine corn prices have eased after Chicago Board of Trade corn futures set fresh three-month lows on Friday on talk about large US corn acreage and better-than-expected yields.
A drying up of export offers from Thailand has added to the woes of Asian feed ingredient buyers, who have been snapping up cargoes from every possible origin from Myanmar to India.
Regional traders said Thailand had started to import corn and there was market talk that the Southeast Asian nation, which was so far exporting the grain, may have already bought two Panama-sized Argentine cargoes.
"I am sure one cargo has been traded to Thailand. I am hearing one more may have been done," said one regional trader.