Argentinian Corn Plays a Big in the Far East


Dec 14, 2022 | Agricultural Markets News

Reading time: 2 minutes

During marketing year 2021/22 (Oct-Sep), two major U.S. markets – South Korea and Taiwan – imported less Corn from the United States than in 2020/21, while imports from Argentina soared. South Korea imports of U.S. Corn fell by 2.2 million tons while rising by just over 2 million tons from Argentina. Taiwan imports of U.S. Corn declined by 800,000 tons, and Argentina Corn rose by 620,000 tons. According to AgFlow data, Argentina exported 4.1 million tons and 0.8 million tons of Corn to South Korea and Taiwan, respectively, in 2022.

As Argentina has maintained a large harvested area for Corn, exportable supplies of Corn have s stayed strong, allowing Argentina to maintain a price advantage against U.S. Corn. Argentina also is an export-oriented country. On average, nearly 75 percent of the Argentina Corn crop is exported and is deliberately priced competitively relative to other exporters such as the United States. Currency gains also favor Argentina– the strength of the U.S. dollar is increasing the cost of U.S. Corn relative to competitors, while a weaker peso is boosting competitiveness of Argentina Corn.

While the United States had ample Corn production last year, domestic use surged in the United States, tightening exportable supplies. Higher-than-average logistics costs and supply chain bottlenecks in the United States and globally also impacted the competitiveness of U.S. Corn. Quality plays a role in both countries as well, with FAS Seoul and AIT Taipei both noting premiums for low Broken Corn and Foreign Material (BCFM) of just $1 to $2 per ton for Argentine Corn.

Argentina’s Corn producers have limited domestic demand versus international solid demand for their Corn supply, allowing them to cater quality premiums to global Corn importers, including South Korea and Taiwan. In contrast, exports are less than 20 percent of use in the United States, with the opposite effect. This alone does not explain shifts in the market but has likely played a part. The result of these factors were prices that favored Argentine Corn.

Argentinian Corn Plays a Big in the Far East

Argentinian Corn Price

FAS Seoul reported C&F (cost and freight) prices of U.S. PNW Corn at $384/ton in October, with U.S. Gulf prices even higher at $412/ton. In the same month, prices from Argentina were $347/ton C&F. AIT Taipei noted that while it is a basis market rather than flat-priced, the trend is the same. In May of 2022, Taiwan’s Members’ Feed Industry bought two 65,000-ton Corn consignments, one from Argentina and one from the United States. The shipment from the United States was purchased at an estimated premium of $4.22 per bushel C&F over the Chicago September 2022 Corn contract, while the shipment from Argentina was purchased at an estimated premium of $3.47 per bushel C&F.

Landed values for imports from the United States and Argentina also support the notion that cheaper Argentina Corn imports were being used to substitute supplies from the United States. Imports of U.S. Corn by South Korea averaged $50/ton CIF higher than Argentina in 2021/22. In the same period, imports of U.S. Corn by Taiwan averaged $16/ton CIF higher than Argentina. As long as weather and nature cooperate, Argentina will generate sufficient exportable supplies, enabling it to grab market share in price-sensitive U.S. markets.

As per AgFlow data, CFR price for Corn exports from Argentina to Taiwan and South Korea between January and December 2022 were $379.5/ton and $374.3/ton, respectively. Since the November WASDE, major exporters’ bids have generally fallen. U.S. bids were down $53/ton to $304, with outstanding sales of U.S. Corn less than half of the level from a year ago and modestly improving barge rates on the Mississippi River. Argentine bids are unchanged at $307/ton.

Other sources: USDA

Try AgFlow Free

Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.

No Credit Card Required & Unlimited Access In Time