Initial reports suggest earthquake will impact grain trade

by Susan Reidy
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TOKYO, JAPAN — The U.S. Grains Council (USGC) received initial reports on March 11 that the Japan earthquake and subsequent tsunami may have caused significant damage to many of the country’s agricultural facilities and production areas.

While the extent of the damage is not yet known, it will likely impact grain trade.

“Some ports in northern Japan, Kushiro, Hachinohe, Ishinomaki and Kashima, were hit by the tsunami. We’ve heard some feed mills and livestock operations have also been damaged by the tsunami. Those facilities were not severely damaged by the earthquake itself but were affected by the tsunami,” said Tommy Hamamoto, USGC director in Japan. “It is too early to tell what effect this will have on Japan’s agricultural sector, but it could be of significance.”

Zen-Noh, Japan’s largest feed producer and purchaser of feed grains, was checking and facilities and operations following the quake, according to news reports. A company spokesman said they were unaware of damage at this point.

Bloomberg reported that corn (maize), wheat soybean and rice futures tumbled following the quake. Corn futures for May dropped 13.75¢, or 2%, to $6.69 a bushel on the Chicago Board of Trade while wheat futures for May delivery dropped 11.5¢, or 1.6%, to $7.29 a bushel.

The earthquake is unlikely to cause significant damage to Japan’s feed and food production, according to Nobuyuki Chino, president of Unipac Grain Ltd.

USGC President and Chief Executive Officer Thomas C. Dorr said, “We extend our most heartfelt wishes to our loyal customers, staff and all the people of Japan in this time of crisis. The council values our 50-plus year agricultural partnership with the people of Japan and stand ready to work side-by-side as you respond and work through recovery. Count on our partnership and friendship now as you always have.”
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