India's traders cancel corn contracts; blend lower grades

Corn exporters in India have cancelled some sales contracts to Southeast Asia and many companies are blending their cargoes with lower grades to offset a rise in local prices, according to several traders.

They said high grade corn from the southern Andhra Pradesh state was being blended with cheaper quality corn from the eastern state of Bihar to offset losses.

India is an important supplier of corn to Southeast Asia to meet immediate requirements of feedmillers.

A bulk of the imports comes from the Americas but due to the longer voyage time, many buyers rely on Indian corn for prompt shipment. Uncertainty over shipments amid a port workers' strike in Argentina in March also forced some buyers in Vietnam and Malaysia to turn to India.

Some of the contracts had to be cancelled because the earlier contracted price was too low compared with local prices, said an executive of a Rajkot-based trading company in the western Gujarat state.

He said in one such deal, 4,000 tonnes of corn scheduled for shipment to Port Klang in Malaysia were not loaded this month.

Traders said in another deal the export of a containerised cargo to Vietnam had been cancelled.

Many companies in India had finalised deals last month for exports in bulk around US$215-US$218/tonne, free on board for May-June shipment, but due to the rise in local prices, they can now export at about US$228/tonne, FOB.