Policies and Programs
Corn Taking Asia by Storm
South Korean, Malaysian &
Indonesian Corn Imports by Origin
Partial year data
In just four years, China has replaced the United States as
the predominant corn supplier in three key Asian markets. The United States
now has only a quarter of its former market share in South Korea, Malaysia,
and Indonesia, while China’s share in these markets has tripled.
United States had a comparative marketing advantage in those markets due to
its ability to consistently and reliably ship large quantities of
good-quality, government-inspected and certified corn. Despite significantly
higher freight costs and relatively high prices, this reliability was of
primary importance to the major buyers.
In recent years, however, as markets evolved to accommodate
buyers’ changing needs and priorities, the U.S. advantages have been
undermined by China. Despite inconsistent quality and shipment scheduling,
China is able to offer lower freight costs and low prices, in part as a result
of its proximity, government support of internal transportation costs, and
value-added tax rebates. Additionally, China has been able to capitalize on
its ability to make small, more frequent shipments, thereby lowering the
storage cost for buyers.
short-term impact of this lost market share for U.S. supplies will be somewhat
mitigated by reduced competition from Argentina and stronger demand within NAFTA
due to tight feed supplies in Canada. China will remain as an impediment to U.S.
export growth potential in Asia, as long as the Chinese government maintains an
aggressive export strategy, even when corn trade returns to normal in Argentina
and Canada’s feed grain production rebounds from two years of drought.
For more information, contact: Elizabeth
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Last modified: Thursday, November 13, 2003