China, the world's second largest corn consumer, has booked over 600,000 tonnes of corn from Ukraine this year and more deals are expected as Beijing's stockpiling dries up supplies and boosts domestic prices.
China's move to import Black Sea shipments under a loan-for-grain deal is seen as a blow to U.S. corn exporters who are struggling to sell the country's record crop.
U.S. corn futures fell for a fourth straight session on Tuesday, trading near a six-week low with additional pressure from China's purchases of Ukrainian corn.
Some of the Ukraine cargoes for April-May shipment were struck at about 1,500 yuan (162 pounds) per tonne, including cost and freight, said one buyer. The price is about 60 percent lower than domestic corn quoted at 2,490 yuan per tonne in the major port of Shenzhen (YC-DEQSHZ).
U.S. corn is quoted about 80 yuan ($13) per tonne cheaper than Ukraine corn, traders said.
"Some mills expect to get import quotas by the end of this month or next month," the buyer said.
The government will issue quotas to mills based on the volume they bought at a special grain auction early in the year.
Beijing's stockpiling has tightened domestic supplies and domestic corn prices have risen more than 100 yuan ($16) per tonne over past two weeks, traders said.
Ukraine shipped nearly one million tonnes or corn to China in 2014 under a loan-for-grain deal and said this month it hoped to double the amount this year.
Ukraine shipped 470,047 tonnes of corn to China in January, surpassing the United States, according to official customs data.[GRA/CN]
China began importing corn in a big way in 2009/10 and took the bulk of its shipments from the United States, but has since last year turned to suppliers in the Black Sea region.