March 10, 2011
Vietnam blames pests for poor quality of Indian corn
Vietnam has refused to accept Indian corn due to issues of quality several times in the past quarter, trading executives said on Wednesday (Mar 9), with the most recent incident concerning at least 34 containers being rejected at Hai Phong port a few days ago.
Corn trade between the two parties has been reduced to a very small amount in comparison with earlier shipments of up to 250,000 tonnes per month, when India was a major supplier of the grain to Vietnam.
The latest logjam regarding quality has forced importers to make more expensive purchases from South America, increasing local Vietnamese prices and hitting trade margins.
"Fresh purchases of Indian corn by Vietnamese buyers have almost stopped, and only a small volume from earlier contracts is being shipped from India," said an analyst.
Another trader said Vietnamese authorities have raised concerns about a pest, tragoderma granarium, being found in some cargoes of Indian corn and soymeal.
Indian exporters acknowledged the fresh rejection, but said it is not possible for pests to remain alive at the present level of pesticide use.
"We increased the methyl bromide fumigation dosage significantly above international norms, as suggested by Vietnam," one of the Indian exporters said.
Since early December, more than 150,000 tonnes of Indian corn and soy has been either unaccepted outright or accepted only after re-fumigation.
Both corn importers and exporters are cautious of future rejections and looking at other sources and destinations, with Vietnamese buyers looking for corn from Argentina and Thailand.
India exports corn fumigated with aluminium phosphine, considered milder than methyl bromide, across Asia; no other Asian countries have complained of pests.
"Until recently, rejected cargoes were re-fumigated at Vietnamese ports at the seller's expense, but the authorities have now decided to stop giving permission to do so," said another analyst.
Indonesian buyers imported more than 200,000 tonnes of Indian corn last month (Feb 2010) and have so far arranged for 300,000 tonnes to be transported in March and April.
Prices are currently offered at about US$325-$330/tonne, cost and freight, for transport of corn from India to Indonesia in bulk, while previous trades were done between US$290 and US$310/tonne.
Vietnamese authorities could not be immediately contacted for comment. According to official documents appraised by Dow Jones Newswires, corn and soy imported from India are included in a list specifying any shipments are to be subjected to detailed pest risk analysis and a phytosanitary import permits.
