January 28, 2008

Asian buyers opt for Indian corn as cheaper alternative over US

India has finalized deals to export a total of 500,000 tonnes to Asian buyers prompted by surging corn prices and scant supply.

Amit Sachdev, an India-based representative of the US Grains Council said Friday that the bulk of the sales have been agreed at around US$250 a tonne, free on board, while exporters are hoping to find buyers for another 500,000 tonnes.

Freight to Southeast Asia is at US$50 a tonne, while the landed cost of Indian corn works out to around US$300 a tonne.

This is still cheaper than corn coming from the US which is offered at US$220 a tonne, but with freight cost of US$93.

Corn offers from India, after nearly two years when it sat out the market, could provide relief to Asian buyers plagued with scanty supplies and record prices.

On Friday, corn on the Chicago Board of Trade extended gains to just below US$5 a bushel for March, just off a record high hit earlier this month.

Escalating prices of US and South American corn and lack of offers from China opened a window of opportunity for Indian farmers to sell in Asia and Middle East markets. 

Sachdev said sales have been made to Malaysia, Indonesia, Taiwan, South Korea and the Middle East.

India expects a record summer-sown 2007/08 crop of 13.07 million tonnes, up 14.3 percent from the previous year, according to the country's farm ministry.