Argentina has already sold 750,000 tonnes of corn to Malaysia this season, compared with 400,000 by the same time last year, data from the Argentine agriculture department shows.
Trade officials said Argentina could possibly more than double its sales to Malaysia this year.
Until last year, Malaysia was China's second-biggest corn customer, after South Korea, taking more than 90 percent of its annual imports of 2.5 million tonnes from the Asian supplier.
But this year, China has sharply reduced its export offers as the country struggled to rein in rising food prices amid eroding domestic grain stocks. The latest indicative prices for Chinese corn was close to $150 a tonne, including cost and freight, in Southeast Asia.
This month, South Korea bought 40,000 tonnes of Chinese corn for shipments between December and March at prices between $147.85 and $148.95 a tonne. "There are not many offers from other places.
Freight rates have also come down. Therefore, corn from Argentina is working out cheaper for us," said one Malaysian trader. Panama dry bulk rates have slipped in recent weeks as business slowed ahead of the year-end holidays.
Modern Panama rates for the benchmark US Gulf-to-Japan route were indicated last week at $61-$63 a tonne for a spot cargo, down from about $65 a week. Traders added some Indian corn had also been sold to Malaysia.
Details about exact volumes were not available. Indian corn was offered around $155 a tonne, including cost and freight. "But for business to take place in large quantities, Indian prices have to come down by at least $15 a tonne," said one regional trader.