Quality issues haunt Indian corn exports

 

 

More than 100,000 tonnes of Indian corn set to be exported to Southeast Asian countries have been rejected at local ports due to poor quality.

 

After the weakest monsoon in 37 years had reduced crop output, unseasonal rains during the harvesting then damaged grains beyond quality limits for exports, traders said.

 

Some export containers were rejected before loading, said an official with Kakinada port in Andhra Pradesh, which handles much of India's corn exports.

 

India sells around two to three million tonnes of corn a year, out of global trade of around 80 million tonnes, and is an important supplier for Asian buyers seeking prompt shipment.

 

Malaysia, Philippines and Vietnam are major buyers of Indian corn.

 

Southeast Asian importers usually reject poor products at the port of delivery, but now they are employing independent quality control personnel to find out at the Indian ports, said a trader with a multinational grain exporter.

 

Industry players expect export buyers to avoid the Indian market in the near future given the absence of quality offerings.

 

Exporters are not actively buying due to quality issues, and the damaged grain percentage is very high this year, said Punam Chand Gupta, a broker based in Nizamabad, Andhra Pradesh.

 

The rejected export shipments were likely to be offered to Indian poultry feed producers at discounted price, he said.

 

Spot corn price in Nizamabad spot market has fallen over 4% in the last fortnight to Rs916.7 (US$19.7) per 100 kg.

 

If quality issues persist, prices would remain under pressure in the medium term despite the drop in the production, said Chowda Reddy, an analyst with JRG Wealth Management Ltd.

 

India's summer-sown corn production is expected to drop 9.3% to 12.61 million tonnes due to patchy monsoon rains, according to the government's latest estimates.