India 2009-10 corn exports to drop 60%

 

 

A combination of poor domestic crop, quality issues, lower global prices and good foreign crop prospects could cause Indian corn exports to drop by 60% in the year to September.

 

Indian corn exports could fall to 1-1.3 million tonnes from 2.5 million tonnes a year ago. India is a leading corn supplier to Southeast Asia and the Middle East. A Bangalore-based trader said exports would fall because Indian corn was too expensive, selling at US$217 per tonne free on board against US$167 per tonne FOB in the US.

 

The trader said buyers will be primarily from Bangladesh, Sri Lanka and Malaysia.

 

The exports are likely to decline from rising domestic demand and late harvests caused by the drought, said Amit Sachdev, India representative of the US Grains Council.

 

Local demand was likely to rise 5% this year from 17 million tonnes a year ago, Sachdev said, while lower international prices and expectations of good production in the US and South America would also affect exports negatively.

 

The government has forecast the summer-sown corn crop, which makes up about 80% of annual output, would fall 9.3% to 12.6 million tonnes after the weakest monsoon rains since 1972.

 

On Tuesday (Feb 2), the USDA projected US corn plantings at 88 million acres, up 1.5 million acres from 2009, for a crop of 12.96 billion bushels. It would be the third-largest crop on record, after 2009 and 2007.

 

Expectations of bumper crops in Brazil and Argentina, the world's largest exporters of corn behind the US, have been pressuring CBOT futures for several weeks. On Wednesday (Feb 3), CBOT corn for March delivery Cc1 fell more than 3% as output forecasts for Brazil and Argentina were raised.

 

An official from a leading exporter of farm products said there may be exports to neighbouring countries such as Nepal, Bangladesh, Sri Lanka once the winter-sown crop is harvested.

 

Indian exports have also been hit by quality issues. More than 100,000 tonnes of Indian corn set to be exported to Southeast Asian countries were rejected at local ports last month due to the poor quality. However, quality had reportedly improved since, as stocks lose some of their excessive moisture caused by flood damage.