Asian mills eye Ukraine corn as rains delay Brazilian shipments
By: Reuters | Oct 15 2015 at 04:12 AM | Maritime
SINGAPORE/SAO PAULO - Asian feed millers are expected to import Ukrainian corn if heavy rains in key supplier Brazil further delay shipments from the country’s busiest Paranagua port, where the waiting time for vessels has already climbed to 40 days, traders said.
While the wait at Brazilian ports has previously exceeded 60 days during peak soybean export seasons, long queues are not normal at this time of the year. A spokeswoman for Paranagua port pointed out that “last year at this time we didn’t have a single ship in the lineup”.
Any resultant shift in demand from Asian millers, who have heavily booked corn cargoes from the No.2 exporter Brazil for October-December shipment, will buoy prices of the grain from suppliers such as Ukraine and the United States <2YC-USG-C1>.
“Our ship has been waiting for 30 days to berth,” said one Singapore-based trader. “We are hearing ... it is taking up to 40 days for some of the ships.”
Rainfall typically stops loading operations at Paranagua as its terminals are not covered.
The region has seen seven days of non-stop rainfall this month and 10 days of showers in September, during which 20 ships were prevented from loading, the port’s spokeswoman said.
Apart from the bad weather, supplies arriving at the port for a bumper Brazilian corn harvest and higher demand due to a stronger dollar have also led to longer queues, she added.
Brazil harvested an all-time high corn crop of 84.7 million tonnes in 2014/15, while its currency, the real, is trading near the weakest on record against the dollar, making Brazilian commodity imports cheaper.
CAUTIOUS, BUT NOT PANICKING
Asian buyers have snapped up Brazilian corn.
Vietnam, home to one of the world’s fastest growing animal feed markets, has blocked about half a million tonnes for shipments in the last quarter.
Importers typically turn to India for corn in the event of any delay from South America, but the South Asian nation is out of the market following lower production due to dry weather linked to El Nino.
Bangladesh, which usually buys Indian corn, has this year booked 150,000 tonnes of Brazilian corn in recent deals.
“Mills are not panicking yet but if there are further delays then buyers will start taking some corn in containers from Ukraine as they wait for Brazilian shipments to arrive,” said a second trader in Singapore.
Paranagua’s spokeswoman said the port had resumed normal operations in sunny weather. But traders cautioned it would take a while to clear the congestion with 60 bulk vessels in the lineup to load corn, soybeans and soymeal.
(Reporting by Naveen Thukral; Editing by Himani Sarkar)