Corn buyers in South Korea, Japan and Taiwan are expected to keep a low profile this week, but overall demand in the region is seen likely to be solid despite rising concerns over bird flu.
Grain importers in Taiwan are likely to be quiet this week after covering their needs until the end of the year in buying that concluded in recent weeks.
The island has now entered its peak season for feed, which accounts for the bulk of corn and soya imports, ahead of the Chinese Lunar New Year vacation at the end of January.
Fears over bird flu have dented demand, although some buyers said that as Taiwan had not yet suffered a major outbreak of the disease demand should not be seriously hit in the long term.
The state-run Taiwan Sugar Corp was planning to hold a tender on Friday for a 35,000-tonne mixed shipment of US corn and soyabeans for end-December shipment, but put it off due to the Thanksgiving holiday in the United States on Thursday.
Instead the firm will likely hold the tender on Tuesday, November 29, a company executive said. Japanese corn buyers were believed to have covered about 40-50 percent of their requirements for the January-March period but were prepared to wait a while before restarting their purchases amid a bearish outlook in freight rates and corn prices.
"The pace of purchases is a bit slower compared with usual years," said a trader at a Japanese trading house.
"Buyers are not too desperate about covering their requirements quickly." Japanese feed makers had bought 1.0-1.1 million tonnes of corn for January-March shipment in the past several weeks, and they would likely buy an additional 2 million tonnes by the end of this year for first-quarter shipment.
"Demand for feed corn is expected to be steady from usual years, but many buyers are still taking a wait-and-see stance," the trader said. Fears about bird flu are intensifying but have not affected demand for chicken meat and eggs in Japan.
"Japanese consumers are still calm, and it has not affected prices of chicken or eggs, but fears could grow and affect demand in Japan if concerns heighten more around the world," said an analyst at a Japanese commodity brokerage.
Japanese consumers have stayed calm as bird flu cases found in Japan this year are not the virulent H5N1 strain, blamed for the deaths of more than 60 people in Asia.
This month, local Japanese authorities decided to cull about 170,000 chickens at a poultry farm north of Tokyo after an avian flu virus was found there.
In South Korea, feed buyers stayed on the sidelines, waiting to see how far the price of corn will fall. "Corn prices in the tender last week fell a little bit.
Buyers will now wait and see the price before they resume tenders," said a trader in Seoul. South Korea's Nonghyup Feed Inc bought optional-origin corn at $127.73-133.25 last on Friday, while Major Feedmills Group (MFG) bought corn at $134.95-131.95 two weeks ago. Still, overall feed demand in South Korea is still healthy despite bird flu fears.
"Feed demand is rising compared with past years, since cattle breeding has increased while growing fears of bird flu around the Asia-Pacific region have not yet affected Korea," a buyer at major feed group in Seoul said.
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