The Hindu Business Line : Corn export demand may touch 5 lakh t

DEMAND for export of corn (maize) could touch about five lakh tonnes as importing nations find it competitive to buy in view of lower price and rising freight charges.

"There is a new interest for our corn. Firstly, our prices are competitive as compared to the US, and secondly, being nearer to the importing countries in Far-East and West Asian countries the freight works to our advantage," according to a trading firm official, who did not wish to be quoted.

Recently, a trading firm won a contract to ship 14,000 tonnes to an unknown destination at $140-143 a tonne f.o.b. At least two trading firms have a total order to the tune of 80,000 tonnes to export corn, while the total contracts for corn exports is estimated at over 1.5 lakh tonnes.

Demand for corn is from Far-East Asian countries such as Indonesia, Vietnam, and South Korea, besides the entire West Asian region, Sri Lanka and Bangladesh.

Prices of animal and livestock feed are rising and, therefore, the attention of the global trade has turned to Indian corn, the official said.

Though the prices are quoted in the $140-a-tonne range now, earlier shipments have been in the $130-a-tonne range. As against this, the price of US corn c&f to the Far-East destination now works out to $175 a tonne. There is a $10-a-tonne advantage for us now. Even if this declines by $5 a tonne, the order will shift hands, the official said.

Corn exports are taking place after a very long gap. "As far as I remember, corn exports have never taken place," said another official of a Gujarat-based trading firm.

From being an importer till last year, the country has turned an exporter this year. The country has so far been a net importer with the Government bringing corn imports under a tariff regime. Under this, only five lakh tonnes can be imported at a 15 per cent concessional customs duty. Any shipment above this quantity will attract a higher duty of 50 per cent. Aiding the exports is a record production of 12.80 million tonnes. Good coverage of the crop during the rabi sowing is also making other nations turn towards India.

Demand for corn exports is mainly due to fall in Chinese production, which is seen at a little less than 114 mt. The US output is seen at 261 mt. Production fall in countries such as Argentina and Brazil is also seen as a factor putting pressure on corn prices in the global market and make importer look to other sources such as India.

Corn prices in the domestic market are ruling steady at Rs 6,000 a tonne. Going by the Government estimates on production, at least 1.7 lakh tonnes of corn would be available for export, industry experts say.

As regards corn consumption, offtake by the poultry sector is expected to be 6.64 mt, the livestock sector 1.39 mt, starch industry 1.10 mt, brewery 60,000 tonnes.

With wheat prices ruling over $175 a tonne, corn could see increased demand from South Korea, Japan and Indonesia.

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