Marubeni Corp. (8002), Japan’s biggest agricultural trader, sees China’s demand for imported corn rising almost fourfold within a decade as the company seeks to raise its share to 20 percent.
With the $2.7 billion purchase of the third-largest U.S. grain merchandiser Gavilon Group LLC this month, Marubeni has increased its corn supply and will use that to boost Chinese exports, said Daisuke Okada, a managing executive officer at the Tokyo-based trading company. Marubeni already supplies about 20 percent of China’s soybean imports, he said.
“I’d like to have our market share at 20 percent, that’s the figure we want to see in all the countries we sell in,” Okada said at a briefing yesterday. “China’s demand for coal, metals and so on is weakening but there’s no stopping of growth for grains.”
China, the world’s second-largest corn exporter as recently as the 2002 to 2003 marketing year, is forecast to import 19.6 million metric tons of corn by 2022 to 2023, according to the U.S. Department of Agriculture. That would mean China’s imports will account for 40 percent of the project growth in world corn trade, the USDA said in February report.
China bought a record 5.23 million tons of corn in the marketing year ended Sept. 30, according to the USDA.
Buying Gavilon has given Marubeni access to 144 American grain collection and storage facilities, as well as trading and sourcing relationships with producers in Australia, Ukraine and Brazil, among others. Together with Marubeni’s current assets, the trader will handle 55 million tons of grain annually.
With Gavilon, Marubeni has lined up alongside the world’s top grain traders: Cargill Inc., Archer-Daniels-Midland Co. (ADM:US), Bunge Ltd. (BG:US), Louis Dreyfus Group and Glencore Xstrata Plc (GLEN), the Japanese company’s Okada said.
The six companies now control almost all the available grain handling assets in the world, which means the main way to expand in this market will be through partnerships, Okada said. Some of Marubeni’s rivals have already approached the trader with offers, he said.
Marubeni also plans to pick a local partner next month to help it expand its feed grain business in Southeast Asia, Okada said. The trader last year formed an alliance with China’s New Hope Liuhe Co., a unit of China’s biggest producer of animal feed and meat, to expand jointly in emerging markets in Africa, the Middle East, eastern Europe and South America.
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