January 9, 2008

 

India corn exporters make hay while the sun shines

 

 

Indian corn exporters, taking advantage of high corn prices on the global market are buying and exporting all the corn they can to Southeast Asian countries hungry for the commodity.

 

For shipping to South-East Asia, Indian corn is priced at around US$260-US$270 per tonne cost and freight (C&F), lower than the US C&F export price of more than US$300.

 

Higher corn costs and freight charges have priced US corn out of reach for Asian feed millers while China is discouraging corn exports through higher taxes.

 

With these two major suppliers reducing corn supplies, attention has now turned to India, once a minor player in the corn trade.

 

The country has seen a rush of trading firms into the spot market as demand hots up.

 

Exporters have shipped about 80,000 tonnes since late October, while about 100,000 tonnes would be exported in January.

 

By January-end India's corn exports by private trade are likely to touch 180,000 tonnes, mainly from demand in South-East Asia.

 

However, the good times may not last: Poultry producers in India are calling for an outright ban on corn exports as they are driving up prices. 

 

India's corn prices have been rising for 15 percent in each of the past two years.

 

Exports accelerated at a faster clip after large players like Adani and Cargill joined in the fray, an Indian analyst said.

 

The exports, which began in October, are mainly to Vietnam, Malaysia, Indonesia and the Middle East.

 

India in 2007 banned private exports for six months to control prices. Trading companies however, have continued buying on expectations of a further rise in prices of the commodity.

 

India's corn consumption stands at 14 million tonnes. Summer production is expected at about 13 million tonnes up 14 percent from the previous year, while winter production is expected at 2 million tonnes. 

 

A top exporter said exporters will export corn until such time when the government clamps down heavily.