Corn demand was expected from Indonesia and Malaysia, but traders said other than rice and corn, they saw negligible demand across the region.

There was talk that Indonesia, a main grains importer in the region, might seek soyabeans from the United States, but the timetable and the amount were unknown.

"I heard they may tender in August at the earliest, or as late as at the of the year," said a Singapore-based trader with a European trading house.

"It's very hard to get a confirmation for things like this. We can only wait until they announce the tender. Now we can only look at rice and corn," he said.

Vietnam, which banned fresh rice export deals in mid-April, allowed fresh deals for rice shipments effective from July 1 with exports capped at 600,000 tonnes for the July-September period.

The Philippine National FoodAuthority said on Thursday it had approved the import of 113,000 tonnes of rice bran for 1998.

Rice demand will also come from Indonesia, where state commodities regulator Bulog has raised its rice import target to 3.1 million tonnes in 1998/1999 from 2.85 million tonnes.

Traders said Vietnam would have to compete with Thailand and China, both offer supplies at low levels.

Rice exports from Thailand, the world's top rice exporter, are set to rise in the second half of this year and some traders say Indonesia is likely to seek rice of Chinese origin.

Traders saw possibilities of Chinese corn hitting Southeast Asia market, also because of the attractive price offered. "With the price you buy from the United States, excluding freight, you can get Chinese corn, with freight included. It also takes fewer days to deliver from China," said one trader.

"It looks like Indonesia will need to import corn as its current crop is not sufficient enough," the trader said. China has a good chance to export corn toIndonesia and the other possible seller is Argentina, he said.

In the past few weeks, Chinese corn has been flowing into South Korea and the Philippines, where rice and corn harvests are expected to drop sharply due to an El Nino-induced drought.

Official data showed China's corn exports jumped 82.1 per cent year-on-year to 1.99 million tonnes in the first five months of the year.

At least two shipments of corn, from China and South America, were expected to arrive Malaysia in July, traders said.

"Corn demand in Malaysia, of course, is much lower than before. They don't import as much, but they still import," said one trader. Some traders, however, said transactions were all in small quantities and price competition was strong.

"Everyone is searching. Most enquiries are small, but that doesn't matter, even they are just a few thousand tonnes," a trader said.

"If you want me to access the Southeast Asia market, I'll still tell you, it's very bad for the rest of the year."Some traders said sales ofIndian soyameal had picked up slightly, although overall sentiment was still gloomy.

"Some trading houses who are covering their shorts go for Indian soyameals," said the trader at the European house.

"But we have to be very careful about the appearance of the meals. Some buyers may reject the shipment if the colour is not right," the trader said.

India, which traditionally exports 60 per cent of its soyameal to Southeast Asia, has suffered slumping exports during the regional economic crisis.

A sharp increase in world soyameal output due to a bumpercrop in the United States, Argentina and Brazil is also depressing prices.