Chinese buyers step up purchase of Brazilian corn
Chinese buyers were heard to secure new cargoes of Brazilian corn following the authorisation granted to Brazilian entities for exports of the crop to China last month.
Chinese state-trading firm Cofco's Brazilian branch was heard to sell 5-9 cargoes to Chinese buyers on a fob basis for shipment by the end of December.
Contracts were signed on an optional basis, with their delivery to China pending documentation by Brazilian and Chinese authorities. Failing to do so, Cofco could divert cargoes to other destinations in east Asia, including South Korea and Vietnam.
At least seven vessels were either seen in shipment line-ups or heard by market participants as chartered to carry Brazilian corn to China since early November. But just the Key Guardian vessel is currently scheduled to call at a Chinese port — the Nansha port in the Guangzhou region, with three others still waiting off the Brazilian coast without a designated destination.
And another three vessels — Kenta, Aom Bianca and Star Iris — are currently scheduled to call at Singapore, with no mention of a Chinese port as a final destination. Star Iris was initially understood to be the first vessel to carry Brazilian corn to China.
Key Guardian, chartered by Cofco for 68,000t of Brazilian corn, was initially scheduled to deliver to South Korea before being rerouted to China.
As of late November, at least 10 vessels were expected to leave Brazil for China by the end of December. All ships are Panamax vessels with 65,000t of capacity and can hold a 5pc surplus, pointing to a potential shipment of 650,000t of Brazilian corn to China in 2022.
On 2 November, more than 100 Brazilian traders, co-operatives and facilities were granted permission to export corn to China after the east Asian country's general customs administration published a list sent by the Brazilian government naming the storage and shipping units that meet phytosanitary requirements.
Brazil signed an agreement with China in May regarding sanitary requirements related to grain imports, including updating quarantine rules. The agreement originally planned for exports to begin in the 2022-23 crop year, but in August it was agreed that there would be no need for on-farm controls for corn that had been harvested in the 2021-22 crop year. Market participants expect Brazil to export 1mn–2mn t of corn to China by the end of January.
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