TOKYO (B)--South Korean corn buying groups, having been on the sidelines in recent weeks, are waiting for c and f prices for U.S. corn to fall below U.S. $100 per tonne for January shipment in order to cover the remaining requirement for this year and also to kick off 2001 coverage, sources at the country's major buying groups told BridgeNews Aug. 4. South Korea is estimated to still need to cover 65,000 tonnes of corn for November and December shipment, they said.
"We are quite relaxed as we have already completed covering the requirement throughout December," an official at the Korean Corn Processing Industry Association (KOCOPIA) said. "I don't see any bullish factor in the world corn market, so we will wait and see the price (before resuming buying)."
An official at the Korean Feed Association (KFA) said KFA Pusan still has one Panamax-sized cargo, or 52,500 tonnes, of U.S. No. 3 corn to buy for December requirement, while KFA Inchon has already completed covering the requirement throughout this year.
"We will have to seek December-arrival requirement later for KFA Pusan when U.S. corn prices for December fall to U.S. $100 (per tonne c and f)," the KFA official said.
The National Agricultural Cooperative Federation (NACF) has also finished its coverage for 2000, except for 12,500 tonnes of U.S. No. 3 corn for December shipment, according to an NACF official.
Both officials at KFA and NACF said they will hold a tender to cover their remaining requirement for 2000 when the U.S. No. 3 corn price falls to $100 per tonne c and f for December or January shipment.
They said U.S. corn has become more attractive to buyers as the price for U.S.-origin corn has decreased to wipe out the price gap with Chinese-origin corn.
"When the prices for the two origins are the same, of course, we would buy U.S. corn for its better quality. We don't want to worry about quality or supply of Chinese corn," the KFA official said. "We are basically planning to buy U.S. origin now in a future tender if prices are sustained at current levels."
Currently, both U.S. and Chinese corn are quoted at $102-$104 per tonne c and f, the traders said.
Earlier in 2000, the gap between c and f prices for Chinese corn and U.S. corn stood around $15 per tonne, which had led South Korea's imports of Chinese corn to balloon from 1999 levels.
In the last tender held by South Korean corn-buying groups on July 27, KOCOPIA bought a Panamax-sized cargo of U.S. No. 2 corn for November-December shipment from the U.S. Gulf at $102.55 per tonne c and f, BridgeNews reported earlier.