Corn exports to Korea are becoming a driving force in the increasing value of U.S. corn, which is significantly benefiting American corn producers.
Most recently, USDA reported that corn futures rose to an 11-year high in Chicago on overseas demand. USDA specifically noted that South Korea’s Nonghyup Feed Inc., the country’s biggest single buyer of feed grains, bought as much as 385,000 metric tons (15.16 million bushels) of corn for feed production in a tender Jan. 7.
South Korea’s purchase of corn confirmed demand remains strong despite higher prices.
According to USDA data reported by suppliers and related industries, Korea has already purchased a total of 3.25 million tons (128 million bushels) of corn in December 2007, for 2008 delivery. U.S. corn accounted for 3.16 million tons (124 million bushels) or 97 percent of the total. Ninety-eight percent was from the United States and the balance, 98 thousand tons or 3 percent, was from India.
Byong Ryol Min, U.S. Grains Council director in Korea, said Council programs and grain trade education seminars contributed greatly to assuring Korean buyers of availability and quality of U.S. corn.
“Council team programs and grain trade educational seminars were instrumental in assuring Korean import buyers of the ability and determination of U.S. farmers to reliably supply quality grains to meet the demands of both U.S. ethanol and the global marketplace,” said Min.
“The Council has also placed special emphasis on explaining the quality and nutritional value of U.S. co-products, such as distiller’s dried grains with solubles, in an effort to meet the end-user’s requirements. All-in-all the Council has shown buyers the importance of doing business with the United States if they want a quality product that is readily available, due to U.S. producers responding to demand pressures.”
Min also attributes Korea’s increasing interest in U.S. corn to China’s inability to export significant quantities of corn. “Korea has previously purchased lower priced corn from China, but due to political pressure in China to ensure domestic supply, Korean buyers have to look elsewhere,” he said.
“China said in late December it will levy taxes on grain exports in 2008 to apparently ensure stable domestic food supplies.” According to the Web site of China’s Ministry of Finance, the rates will range from 5 to 25 percent. The new tax rate for processed corn is at 10 percent, while the tax on unprocessed grains will be 5 percent.