July 8, 2008
South Korea''s feed companies buying wheat as corn prices remain high
South Korean millers who make animal and poultry feed may buy a few cargoes of feed wheat to substitute corn, which is more expensive, a grains buyer based in Seoul said Tuesday.
"If the price is around US$370/metric tonne-US$380/tonne, feedmillers may buy a few cargoes of feed wheat, possibly from Ukraine," the trader said.
The decision was hastened by India''s ban on corn exports last week, which meant one less corn exporter in the region after China curbed exports earlier in the year.
South Korean feedmillers are now also looking to source corn from countries such as Vietnam, he said.
South Korea''s feed buying is generally done by two industry associations - the Korea Feed Association and the Major Feedmill Group.
In June, these groups bought a total of 110,000 tonnes feed wheat from Ukraine at US$370/tonne, on a cost and freight basis, around US$30/tonne cheaper than corn from the US.
Corn and feed wheat can be substituted in many feed formulations.
