The savage earthquake and tsunami and growing nuclear crisis, which hit Japan, has
caused a trail of destruction, not seen since World War II, where tens of thousands
of people are thought to have lost their lives. At the epicentre, in the north of the
country, storage and port facilities — including Sendai, Hachinohe and Kamaishi —
were damaged, along with inland transportation networks.
Traders predict shipments for Japan may be delayed for the foreseeable future
until the transportation network is restored, while southern ports, which escaped
the devastation — Tokyo, Yokohama, Osaka and Hiroshima — may see more
shipments. Japan is a leading player on the world market, importing a huge 25mt
(million tonnes) of cereals and coarse grains (including 16mt of corn), 12mt of
oilseeds and oilmeals and significant quantity of dairy and livestock products, each
year. The northern ports damaged by the tsunami that handle some of Japan’s
compound feed are directly linked to poultry farms in the area. And, while the
scale of the disaster and damage to feed mills and their supplies is as yet unclear,
Japan’s farm ministry said that 4.8mt of the 24mt of feed produced in Japan, are
from the northern areas near the centre of the disaster. Power shortages are
hampering production at some plants, which survived with little or no damage
The disaster in Japan adds to negative pressures, weighing on agricultural
commodities, including reduced consumption of grain after rallying energy prices
raised concerns about a slowdown in global demand for commodities and
contrasts with high commodity prices evident at the beginning of March. Any sign
of a temporary fall-off in global demand would ease tight crop supply pipelines, at a
time when external markets may not offer much support, as investment funds have
already made the switch from shares, metals and crops to less riskier assets. At the
Chicago Board of Trade (CBOT) corn for May delivery was $261.52/t (17.23 — 14
March).
Maria Cappuccio