South Korea's largest feedmiller, Nonghyup Feed Inc., Friday made a rare purchase of Indian corn, buying 39,000 metric tons from global trader Peter Cremer at $259.83/ton, basis cost and freight for arrival by July 10, trading executives said.

Nofi also bought a 69,000-ton U.S. corn cargo from Cargill for arrival by Nov. 30, with 29,000 tons priced at $278.99/ton and the rest at a $1.78 premium to the December futures contract on the Chicago Board of Trade, both C&F.

There is an additional charge of $1.50/ton for unloading part of both the cargoes at a second port, they said.

South Korea is the world's third-largest corn importer by volume after Japan and Mexico, buying most of its annual needs of more than 8 million tons from South America and the U.S., which meet its stringent quality norms.

Analysts and traders said the purchase indicates that South Korean feedmillers are willing to experiment with Indian cargoes to cut costs at a time when prices of soymeal, another animal feed, is close to multi-year highs and feed wheat supplies from Australia and the Black Sea region are uncertain.

Indian corn is among the world's cheapest and is available at a $20/ton discount to U.S.-origin corn.

"Indian corn can help meet immediate needs at short notice," a feed miller in Seoul said.

Smaller volumes can be purchased for prompt shipment as the voyage duration is much shorter, he noted.

Significant volumes of Indian corn are already being bought by Indonesia, Malaysia and Vietnam, but major importers Japan and South Korea have mostly stayed away due to quality concerns.

"For the time being it looks like South Korea will buy Indian corn only to plug gaps in supply, but even a toehold in such a large market is important," a New Delhi-based exporter said.

If India delivers on quality, it can become a regular supplier to price-conscious South Korean buyers, a trader in Singapore said.

South Korea imports between 5.7 million tons and 6.5 million tons of feed-grade corn a year, depending on prices.

Write to Sameer C. Mohindru at sameer.mohindru@dowjones.com

(END) Dow Jones Newswires

June 08, 2012 07:28 ET (11:28 GMT)