July 20, 2012

 

India's 2011-12 corn exports may hit record 3.5 million tonnes

 

 

Prompted by higher global prices and a bumper harvest, India's corn exports could hit a record 3.5 million tonnes in the 2011-12 marketing year to September, the India representative of a major US grains export association said on Thursday (July 19).

 

India is Asia's second-largest grower of corn after China but it is not a significant global exporter of the grain. It mainly sells to Malaysia, Indonesia and Vietnam, which seek small cargoes for prompt delivery.

 

India exported about 3.2 million tonnes of corn in 2010-11, traders said. It harvested 21.6 million tonnes in the 2011-12 crop year which ended in June, slightly lower than the record 21.7 million tonnes of the previous year. Domestic consumption is pegged at around 17-18 million tonnes annually.

 

"So far, Indian traders had shipped nearly 3.1 million tonnes and they could easily ship another 400,000 tonnes in the next two months," US Grains Council India representative Amit Sachdev told Reuters. The US Grains Council is a private organisation based in Washington that works to build export markets for US barley, corn and sorghum.

 

"A weak rupee and a rally in global corn prices has made it attractive for Indian traders to sell corn to feed millers in countries such as Malaysia, Vietnam and Indonesia despite a surge in the domestic prices," Sachdev said.

 

"Indian traders also have the advantage of surplus corn availability, while others are facing shortages due to higher demand from China," he added.

 

China is likely to boost imports to four million tonnes in the 2011-12 crop year from an estimated 1.3 million in 2010-11, a Reuters poll showed. The August corn contract on the National Commodity and Derivatives Exchange (NCDEX) hit a record high of INR1,557 (US$28) per 100 kilogrammes on Wednesday (July 18), spurred by global prices and also because of worries about patchy monsoon rains.

 

US corn also jumped to an all-time high on Thursday (July 19), rising above US$8 a bushel as the worst drought to hit the US Midwest in 56 years continues to curb grain yields.

 

Indian corn is quoted at around US$300 a tonne, including cost, insurance and freight to Southeast Asia compared with US$330 to US$340 being offered for South American corn.

 

In June, Vietnam rejected 6,300 tonnes of Indian corn and soymeal due to an insect infestation, but Sachdev said quality controls had improved. India's corn output next year may be affected by the lower than average monsoon rains so far this season, although industry officials and traders are optimistic the rains will increase in the next few weeks.

 

"Farmers can switch to corn much later than other crops and much would depend upon the revival of monsoon in coming weeks," Sachdev said.