* Near 12 pct of 2012 grain, oilseed trade containerised
* Containers cheap to Asia due to its consumer goods exports
By Sarah McFarlane and Jonathan Saul
LONDON, Feb 14 (Reuters) - Food importers in Asia are
switching from dry bulk cargo ships to container vessels, which
normally carry goods such as toys and TVs, as they offer a way
to import smaller amounts and can be cheaper per tonne.
The global transport of agricultural commodities
traditionally has taken place on carriers brimming with 60,000
to 70,000 tonnes of a single cargo such as corn or sugar.
But the market is changing as ships seek to fill empty
containers after unloading consumer goods in Western countries
and offer competitive rates for commodities going back to Asia,
the world's manufacturing hub.
At the same time, Asian import demand for animal feed grains
is increasing as rising incomes trigger a move away from the
traditional rice-based diet into more meat and dairy products,
providing more opportunities for smaller importers.
China is expected to surpass the European Union as the
world's leading consumer of pork on a per capita basis by 2022,
while its dairy product consumption is expected to rise by 38
percent, according to the U.N. Food and Agriculture
"As Southeast Asia develops economically, you have demand
for better quality, high-protein diets, and ports don't
(necessarily) have the infrastructure for bulk vessel
receiving," said Brian Bickford, president of AgriLogistics, a
U.S. company specialising in grain shipping.
"You've got a lot of small growing businesses in South East
Asia that can afford 1,000 or 5,000 tonnes of an agricultural
commodity but cannot participate in large trade. Containers
represent an opportunity to those businesses," Bickford added.
While buying in bulk can sometimes be economical, it also
can put pressure on an importer's working capital. A standard
20-foot shipping container holds only around 20 tonnes of grain.
"Credit lines haven't really gone up the way food prices
have increased," said a Singapore-based trader, who sells South
American corn and soymeal in Asia.
U.S. containerised grain exports to Asia have more than
doubled since 2006 to reach 470,832 20-foot containers in the
first 10 months of 2013, up 10 percent from the year before,
according U.S. Department of Agriculture (USDA) data.
Analysts estimate that 12 to 15 percent of Australia's grain
exports are now shipped in containers to Asia.
"We know that the grain trade in containers is growing,
especially in Australia because of the proximity to the far
eastern markets," said Yuri Makarov, a senior economist at the
International Grains Council.
Asia is the top destination for grain container shipments,
but brisk trade also takes place from Latin America to Europe
and Europe to the Middle East.
Around 12 percent of global trade in agricultural goods such
as oilseeds and grains, traditionally shipped in bulk, was
shipped via container in 2012, data from shipping consultancy
Seabury Group showed.
Containers offer a more flexible option for smaller
exporters as well as importers.
"Unless we are talking about the major agricultural trade
houses, most farmers cannot fill one ship alone," said Jan
Tiedemann, a shipping analyst with consultancy Alphaliner.
"With containers it's different. A farmer can theoretically
sell 100 tonnes of grain on eBay and ship it to China."
The cost of shipping sugar from Brazil to China in
containers can vary from nearly zero to $20 per tonne, compared
with up to $70 per tonne in bulk, Bas Van Goor, a sugar trader
at agriculture trade house RCMA said.
"The advantage is clear for the shipper, who benefits from
the flexibility of their commodity being moved in smaller
shipment sizes allowing them to quickly reach many different
locations," said Vincent Clerc, chief trade and marketing
officer with the world's biggest container shipping firm, Maersk
Future growth in food container trade to some extent depends
on the global demand for Asian manufactured goods, which makes
empty containers available in food exporting countries.
"We rely on the American consumer to do their part in
keeping this a liquid business. It makes it more challenging to
find a container for your shipment if the American consumer
didn't buy a Barbie doll or a Dell computer out of that
container last week," AgriLogistics' Bickford said.