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Market News
Demand for non-GM Indian corn rises in the global market.
Nov 10, 2022
Demand for corn exports has increased as the European Union (EU) is scouting for supplies from India, as the cereal crop cultivated in the country is free of any genetic modification (GM). 'There is a sudden demand for corn from the EU in view of the Indian crop being non-genetically modified. But Europe, which wants the grain for feed purposes, is finding prices too high for comfort,' said a trade analyst without wishing to identify.
'After a couple of months, we are seeing demand for Indian corn from countries such as Vietnam, Malaysia and also in small quantities from Sri Lanka. We are quoting around $310 tonne,' said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA).
'We are offering corn at $310-315 cost and freight. But in bulk, we are quoting $290-300 free-on-board,' said Bimal Kumar Bengani, Managing Director of Kolkata-based Bengani Export Pvt Ltd.
Below MSP
According to data from Agmarknet, a unit of the Agriculture Ministry, the weighted average of corn prices has currently declined below the minimum support price (MSP) of Rs.1,962 a quintal. This week, the price is Rs.1,930. Prices last week dropped by Rs.160 a quintal to Rs.2,038.7 a quintal.
Currently, corn on the Chicago Board of Trade is quoted at a four-week low of $6.66 a bushel ($262.14 or Rs.21,325 a tonne). In the spot market, Argentina is offering corn at $305, Brazil at $298 and the US at $349. 'Demand for our corn has always been there, but the problem is that domestic prices have shot up. Shipments to Bangladesh have been hampered by new trade regulations, while Nepal is buying, fearing that prices may go up further,' said Mukesh Singh, Co-founder of Mumbai-based MuBala Agro Commodities Ltd.
H1 shipments down
In the first half of the current fiscal, Bangladesh imported 8.91 lakh tonnes of corn from India, followed by Nepal, which bought 2.26 lakh tonnes and Vietnam, which purchased 1.4 lakh tonnes, data from Agricultural and Process Food Products Export Development Authority (APEDA) show.
The data showed exports of other cereals, mainly corn, dropped to 15.3 mt in the first half of the current fiscal compared with 17.95 mt during the same period a year ago. However, the per tonne unit value in dollars has increased by 12.6 per cent during the period.
Prakash said he was sourcing corn from Maharashtra at over Rs.2,100 a quintal and for delivery in Mumbai from where it is shipped, the cost is Rs.2,200.
Record output seen
Maize prices had almost topped Rs.2,200 a quintal in the third week of October before declining to current levels as the kharif crop has begun to arrive in the markets. During the same period a year ago, prices hovered around Rs.1,650.
Kharif maize production has been pegged at a record 23.10 million tonnes (mt) by the Ministry of Agriculture for the 2022-23 crop year ended June compared with 22.63 mt in the 2021-22 crop year. 'Corn prices are ruling higher as wheat prices are at record highs due to supply shortage after the crop was affected by the heatwave in March-April,' said MuBala’s Singh.
LCs for Bangladesh
'The crop has begun arriving in Maharashtra but the Karnataka crop is delayed due to rains. It is expected to arrive in December,' said ACEA’s Prakash.
MuBala’s Singh said arrivals in the eastern part of the country will likely improve only after rabi season corn, grown in Bihar, hits the market. 'We are facing problems in shipping to Bangladesh as the Sheikh Hasina Wajid government is insisting we pay 100 per cent margin money for opening letter of credits. As a result, only established players are looking to export, while small players are hesitating,' he said.
'Taiwan is another destination for Indian corn but its regulations are tough and specifications for characteristics such as aflatoxin and moisture are stiff. This is one reason why many exporters hesitate to ship to that country,' Prakash said.
Increasing local demand
The analyst said the Centre should look at providing assistance for corn exports so that it can emerge as a key player in the global market. 'If the Centre does that, we can repeat the success we have got in the rice market,' he said.
But industry experts pointed to the rising demand for corn in the domestic market as poultry feed, which has been witnessing phenomenal growth, and for the starch industry. 'Two years ago, we had to import corn to meet domestic demand. Then, prices surged to over Rs.26 a kg at the farmgate of poultry growers. The Centre has to take this into account,' the expert said.
The analyst said India could meet the EU demand mainly since the major suppliers Ukraine and Russia, in the global market are at war. However, India is a destination far off compared with others such as Brazil or Argentina.
thehindubusinessline.com
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