Japan feedmakers to tap corn stocks after U.S. supply disruption

(Photo courtesy Canada Beef Inc.)

Tokyo | Reuters — 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 U.S.

Japan’s Ministry of Agriculture, Forestry and Fisheries plans to approve the measure after heavy storms in the northwestern U.S. caused lengthy delays to grain loadings in Japan’s main corn supplier.

Japan, the world’s top corn importer, is projected by the U.S. Department of Agriculture to import 15 million tonnes in the 2016-17 crop year.

“We have received 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 the feed department at the agriculture ministry told Reuters on Thursday.

“We plan to approve the request,” he said, adding that other feedmakers also have inquired recently about possible use of stockpiles.

He said emergency stockpiles have been used in the past in the case of typhoons and other 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 U.S. 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 U.S. Possible countries of origin include China, Australia or Russia, he said.

Blizzards, avalanches and heavy rain in recent weeks have hit the U.S. transport of corn, soy and wheat to ports from where they head for the Asian market.

Reporting for Reuters by Yuka Obayashi.

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