South America corn woes reopen Vietnam’s origin options
Surging corn prices in key South American export hubs have forced VietnamвЂ™s corn suppliers to seek other origins, potentially...
Surging corn prices in key South American export hubs have forced Vietnam’s corn suppliers to seek other origins, potentially re-opening the country’s market to US exporters, trade sources have told Agricensus Thursday.
Vietnam is one of the world’s biggest corn importers, with USDA expecting the country to import 12 million mt of corn in the 2020/21 marketing year, according to the USDA’s local office.
“I have also heard that corn sellers are now thinking of optional origins i.e South American/South African/US,” one trader told Agricensus, noting that “buyers in Vietnam all prefer South American origin.”
Argentina is the dominant origin, covering 71% of Vietnamese corn imports but with cash premiums spiking in Argentina, importers into Vietnam have looked to offer on more flexible worldwide origins, typically adding the US and South Africa.
During 2019 Argentina shipped 7.5 million mt of corn to Vietnam, with Brazil also supplying a further 4 million mt of corn exports, according to the Agricensus Export Dashboard.
At the moment, 403,842 mt of Argentinian corn is expected to load between October 14-November 14 destined for Vietnam, with 6.2 million mt already imported by the country to date.
In 2020 Argentina and Brazil had to share the Vietnamese corn import market with Russia, the United States and Ukraine that exported relatively modest volumes of 441,784 mt, 222,433 mt, and 66,090 mt respectively.
But with Argentina and Brazil now looking close to exhausted after a frantic export program, fears over the prospects for new crop supply have fuelled the switch away from South America origins.
Brazil and Argentina face a series of problems from fluctuating currencies, delays to new crop plantings, industrial action, rising domestic demand and weather issues that have supported basis price for both the old and new crops.
Offers collected by Agricensus on a daily basis from market sources now explictly include either worldwide origin or South American, South African and US origin rather than just South American.
“Yes, it adds optional [origins] for sales, so that traders can ship US corn in case the South American price goes mad in 2021. They just put the option in case of strikes in Argentina or they cannot get supply from (the region),” the second trader said.
“It is a matter of price in the end. You can always have it if you pay up. South American corn has better moisture [level] and less powder versus the US,” the second trader added.
Agricensus assessed the APM-13 CIF Vietnam corn price at $249.75/mt on Wednesday, the highest price since the assessment began in June 2019.
Cash offers for South American corn seen by Agricensus on Thursday were as high as $270/mt CIF Vietnam for December shipment and $269/mt for January.
Worldwide corn offers were spotted at $253/mt CIF Vietnam for December shipment and $228/mt for new crop shipment in March.