February 14, 2014

India's corn exports seen to decline 15%

Driven by more acreage, India's corn is expected to increase a year ago, however, this may not turn into higher realisations in terms of foreign exchange.

Despite a drop in prices on a year ago, corn remained uncompetitive in the exports market as prices in the global market were lower, said an official of India's Agricultural and Processed Food Products Export Development Authority (APEDA).

During March-December last year, the country had exported three million tonnes, one million are projected to be exported in the rest of the financial year. A year ago's exports were five million; a drop of up to 15% is seen by the APEDA.

Traders expected a higher decrease as they go by the crop season, September to October. More-competitive prices of Argentina and Brazil's exports to Southeast Asia (the major consumer) have left Indian corn behind.

According to experts, there was a price differential of 5-7% for importers buying from rivals. But as the winter crop is yet to arrive, the scenario may change.

However, the president of All India Starch Manufacturers' Association, Vishal Majithia, says the arrival of the winter crop will not pull down the prices further.

The crop, he said, would meet the requirement for the next seven months and the subsequent one will arrive in October. "So, the probability of a further correction was bleak."

The consistently high prices in two years and the mechanisation of production practices had motivated the farmers to grow corn, said Paviter Pal Singh Pangli, a farmer from Punjab.