Japan, Asia’s second-biggest wheat importer, reduced planned purchases of the grain for animal feed to the lowest level in four years as demand shifts to cheaper corn.
The government plans to buy maximum 680,000 metric tons of feed wheat for the year beginning April 1, a 24 percent drop from this fiscal year, the Agriculture Ministry said in a statement on Tuesday.
“Demand for wheat from Japanese feed producers is likely to weaken as corn is more affordable for them,” said Yoshiharu Toeda, a deputy director at the ministry’s feed division.
Corn futures in Chicago gained 0.1 percent to $3.7925 a bushel at 5:21 p.m. in Tokyo. The price has lost 21 percent in the past year. Wheat futures rose 0.4 percent to $5.16 a bushel, down 24 percent in the past 12 months.
The ministry also cut its planned purchases of feed barley by 47 percent to 690,000 tons next fiscal year, as Japan removed controls over imports from Australia in line with a trade agreement signed by the two governments last year.
Australia was the largest supplier of feed barley to Japan, representing about 60 percent of imports estimated at about 1 million tons this fiscal year, according to Toeda. The ministry won’t purchase Australian feed barley in its weekly tenders next fiscal year, as its imports will be done by private companies, he said.
To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net Jarrett Banks, Sungwoo Park
