Japan feedmakers to tap corn stocks

Japan's feedmakers are expected to tap the country's emergency stockpiles of corn as inventories decline to critically low levels due to a delay in shipments from the United States. Japan's Ministry of Agriculture, Forestry and Fisheries plans to approve the measure after heavy storms in the northwestern United States caused lengthy delays to grain loadings in Japan's main corn supplier.
Japan, the world's top corn importer, is projected by the US Department of Agriculture to import 15 million tonnes in the 2016/17 crop year. "We have received a request from one Japanese feedmaker to use a few thousand tonnes of corn in emergency stockpiles from the end of February due to the recent delays in shipment from the United States," Takanari Ishibashi, deputy director of feed department at the agriculture ministry told Reuters on Thursday.
"We plan to approve the request," he said, adding that other feedmakers had also inquired recently about the possible use of stockpiles. He said emergency stockpiles had been used in the past to offset shortages due to typhoons and other types of bad weather. Japanese feedmakers are required to hold emergency stocks of 850,000 tonnes of feed grains, mainly corn, which is equivalent to about one-month's local demand. The companies need to seek approval from the government to use them in an emergency.
A source at a Japanese feedmaker said it has corn inventories for about one month of use, but the stock may fall to a critical level in the early half of March if the current backlog at the US Pacific Northwest ports continues. A senior official at a major Japanese trading house said last week his company was looking into where to buy corn as an emergency measure if it was not able to source grain from the United States. Possible countries of origin include China, Australia or Russia, he said.
Blizzards, avalanches and heavy rain in recent weeks have hurt the US transportation of corn, soy and wheat to ports from where they head for the Asian market. As importers scrambled to find immediate supplies, they also looked to lock in forward purchases from the United States. Japan bought 937,800 tonnes of US corn last week, their largest single-week purchases on record, including more than 700,000 tonnes for shipment before September, according to US Department of Agriculture data published on Thursday.