Traders have reported that Chinese buyers have cancelled shipments of Ukrainian-origin animal feed corn, amounting to several hundred thousand metric tons. The precise volumes remain unclear, but it is estimated that around 300,000 tons have been cancelled across up to five Panamax shiploads, which were initially purchased for April/May shipment. The majority of these cancellations have occurred within the last two weeks.
According to a German trader who spoke on the condition of anonymity, China is believed to be limiting corn imports to support its domestic farmers amidst current low prices. Ukraine serves as a significant corn supplier to China, with Ukrainian brokers indicating that 600,000 tons of corn were set for export to China in April and 400,000 tons in May. However, a source in Ukraine familiar with the matter highlighted a decline in Chinese consumption, coupled with full warehouses, leading to a broader reluctance to import, not limited to Ukrainian grain.
The source emphasized that it appears companies have been advised not to fulfill contracts, extending beyond Ukraine to encompass all supplies in general. This development aligns with China’s previous cancellations of Australian and U.S. wheat purchases, attributed to declining prices and a slower economic growth rate. The ongoing low corn prices are influenced by anticipated high U.S. inventories, with the U.S. Department of Agriculture (USDA) expected to forecast elevated season-ending U.S. corn stocks in its upcoming world supply and demand report.