April 6, 2011

India sells rejected corn, soymeal to Indonesia

India has sold 50,000 tonnes of corn and soymeal to Indonesia after being rejected by Vietnam due to the presence of insects, while Indian exporters have not resumed cargo sales to Vietnam, traders said on Tuesday (Apr 5).

The two ships held in late January at the northern port of Haiphong and Cai Mep port in Ho Chi Minh City left for Indonesia in late March, after the plant protection department rejected proposals to refumigate the cargoes.

The quality of the corn and soymeal remained good after the detention, traders familiar with the sales said. They did not give further details.

The cargo's departure has ended efforts over the course of about two months by sellers, buyers, Indian agricultural officials and diplomats to seek a solution after a type of beetle typical in India was detected, prompting the rejection. The efforts included a visit by some Indian officials to Hanoi and Haiphong ports.

Indian traders said exporters were still not selling cargoes to Vietnam as they feared further rejections.

Since India has not heard of any other importer complaining about quality, Indian traders said Vietnam's refusal to accept cargoes might have some political overtones.

Traders in Vietnam have said given the Southeast Asian country's traditional role as a key buyer of India's corn and soymeal, they did not expect India to interfere strongly to get the cargoes in, as this might hurt the overall relationship.

Corn prices in Vietnam had risen 11% after the cargoes had been rejected, an industry official said.

Feed prices in Vietnam have now nearly doubled from a year ago due to exchange rate changes, high bank interest rates and rising production costs, as Vietnam imports 60% of the material used for processing, state media said on Tuesday.

Feed prices were set to further increase in coming days after Vietnam raised retail fuel prices last month following a hike in electricity and a major devaluation of the dong by 8.5% in February.