BEIJING (Reuters) - China, the world’s second largest corn consumer, has booked over 600,000 tonnes of corn from Ukraine this year and more deals are expected as Beijing’s stockpiling dries up supplies and boosts domestic prices.
China’s move to import Black Sea shipments under a loan-for-grain deal is seen as a blow to U.S. corn exporters who are struggling to sell the country’s record crop.
U.S. corn futures fell for a fourth straight session on Tuesday, trading near a six-week low with additional pressure from China’s purchases of Ukrainian corn.
Some of the Ukraine cargoes for April-May shipment were struck at about 1,500 yuan ($240) per ton, including cost and freight, said one buyer. The price is about 60 percent lower than domestic corn quoted at 2,490 yuan per ton in the major port of Shenzhen.
U.S. corn is quoted about 80 yuan ($13) per ton cheaper than Ukraine corn, traders said.
“Some mills expect to get import quotas by the end of this month or next month,” the buyer said.
The government will issue quotas to mills based on the volume they bought at a special grain auction early in the year.
Beijing’s stockpiling has tightened domestic supplies and domestic corn prices <0#ASCORN-CN> have risen more than 100 yuan ($16) per ton over past two weeks, traders said.
Ukraine shipped nearly one million tonnes or corn to China in 2014 under a loan-for-grain deal and said this month it hoped to double the amount this year.
Ukraine shipped 470,047 tonnes of corn to China in January, surpassing the United States, according to official customs data.
China began importing corn in a big way in 2009/10 and took the bulk of its shipments from the United States, but has since last year turned to suppliers in the Black Sea region.
Traders said U.S. corn has become less popular among Chinese buyers after U.S suppliers asked buyers to bear costs from the potential risks from imports of genetically-modified corn.
“Suppliers have revised the contract item, that’s the reason,” said a trading manager with a state-owned trading house, when asking why buyers have not booked cheaper U.S. corn.
A second trader said feed mills are worried that Beijing may turn away U.S. cargoes again after more U.S grain elevators accept GMO corn containing Syngenta AG’s Agrisure Duracade trait which has not yet been approved by China.
China has cleared imports of Syngenta’s MIR 162, the strain at the center of a string of lawsuits over U.S. grain shipments after Beijing’s rejections last year cost the U.S. agriculture industry up to $2.9 billion.
Additional reporting by Naveen Thukral in Singapore; Editing by Richard Pullin