Thailand, Asia's biggest exporter of frozen chicken, expects higher prices of corn and soybeans to stoke food inflation as the cost of feeding animals climbs.
"We are now facing higher cost of feedstuff and we expect to see a rise of 5-10 percent in food prices in the fourth quarter of the year," said Pornsil Patchrintanakul, deputy secretary-general of the Thai Chamber of Commerce.
On corn, importers are taking a certain amount of comfort from Brazil's record harvest. But there are caveats.
"Brazil has a record corn crop. They're expected to export 14 million metric tons. But there's going to be a lot of competition for that cheaper Brazilian corn," said Bill Tierney, chief economist with Chicago-based AgResource Company.
BULGING DEMAND PIPELINE
Parking on the sidelines to avoid the sting of higher prices seems like a sensible tactic
Morocco is currently reluctant to buy, but faces its highest cereal import needs in three decades due to a poor domestic harvest. The north African country's cereals crop fell from 8.4 million tonnes in 2011 to 5.1 million tonnes this year.
"Buyers have been rejecting offers in the last couple of weeks expecting prices to come down," a Singapore-based grain trader said. "We have seen it in South Korea, the Philippines and Vietnam but how long can they wait?"
Buyers will do their best to hold out for the release of new crop grain in September and October from multiple sources including Eastern Europe, with Black Sea countries having forged a place on international markets as key suppliers of grain at cheap prices.
However those origins are also under pressure.
Hot and dry weather has forced Russia, Ukraine and Kazakhstan to reduce their harvest forecasts and the region's total grain output could be at least 35 million tonnes less than in 2011. (Additional reporting by Naveen Thukral in Singapore, Karl Plume in Chicago, Michael Hogan in Hamburg, Valerie Parent in Paris, Sarah McFarlane and Jonathan Saul in London, Souhail Karam in Rabat, David Alire Garcia and Adriana Barrera in Mexico City, Maha El Dahan in Abu Dhabi, Risa Maeda in Tokyo, Meeyoung Cho in Seoul, Ho Binh Minh in Hanoi, Apornrath Phoonphongphiphat in Bangkok, Erik dela Cruz in Manila and Ratnajyoti Dutta in New Delhi; editing by Philippa Fletcher)