The Hindu Business Line : Plea to monitor maize exports via quota allocation

Caution bells
With no bird flu this time, demand from poultry sector will be more.
High international prices that have made exports attractive
Kharif output at 11.43 mt is lower than last year's 12.41 mt
With rabi production projected at around 2.6 mt, supply to just about match demand

New Delhi , Nov. 30

Domestic starch manufacturers have reiterated their demand for regulating maize exports through allocation of quotas by the Agricultural and Processed Food Products Export Development Authority (Apeda).

"We are not calling for any ban on exports, nor are we saying that farmers are not entitled to the current price levels. Our only concern is on the availability front. The Union Government should ensure that there is no domestic shortage of maize and exports be subjected to release of quota to be monitored by Apeda or similar bodies," said Mr Amol S. Sheth, Managing Director, Anil Products Ltd, which is part of the Ahmedabad-based Lalbhai Group.

Domestic demand

According to Mr Sheth, the domestic demand for maize is nearly 14 million tonnes (mt), of which the poultry sector's requirement is 7.1 mt, with the starch and livestock industry accounting for 1.45 mt each and human consumption comprising another 3.6 mt.

Production, as per the Agriculture Ministry's estimates, has risen from 11.15 mt in 2002-03 to 14.98 mt in 2003-04, 14.18 mt in 2004-05 and 15.09 mt in 2005-06. However, this year's kharif output, at 11.43 mt, is lower than last year's 12.41 mt. With rabi production projected at around 2.6 mt, supply would just about match demand.

"There are two factors here. The first is that there is no bird flu this time and that would increase demand from the poultry sector. The second is high international prices that have made exports attractive. Till now, we were exporting 2.5-3 lakh tonnes (lt) every year to Bangladesh, Sri Lanka and Nepal. But since October, around two lt have been contracted additionally for the Far-East and West Asian markets and we feel this figure could potentially touch 1.5 mt," noted Mr I.K. Sardana, Managing Director, Sukhjit Starch & Chemicals Ltd, Phagwara (Punjab).

Imports unviable

It is the possibility of large-scale exports that have driven up prices in recent months. Maize prices at Nizamabad (a benchmark centre) are currently ruling at around Rs 740 per quintal, against Rs 560 per quintal at this time last year. On the other hand, US-origin maize is quoting at $145 per tonne at the Chicago Board of Trade. Adding freight costs, the landed price of imported maize would be around $190 per tonne and if, on to this, port handling charges, internal freight and a 15 per cent Customs duty were loaded, the cost would be no less than Rs 1,000 per quintal.

"Imports are not viable," admitted Mr Ganpatraj L. Chowdhary, Managing Director of the Ahmedabad-based Riddhi Siddhi Gluco Biols Ltd, which along with Anil Products, Sukhjit Starch, Maize Products (Sayaji Industries Ltd, Ahmedabad), Gujarat Ambuja Exports, Universal Starch Chem Allied Ltd and Gulshan Polyols Ltd, dominate the Rs 1,500-crore domestic starch industry.

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