July 30, 2019
India expected to import more corn
India is bringing in more corn for chicken feed than ever before and is expected to purchase the grain at a record one million tonnes in the year starting in November.
According to Jaison John, general manager of procurement at top poultry producer Suguna Foods Pvt, Myanmar and Ukraine should contribute to most of India's corn imports.
This uptrend is supported by a rising consumption of non-vegetarian food stimulated by India's growing population, an increase in disposable incomes and changing food habits, said CLFMA, an association of Indian feed manufacturers.
Per capita incomes jumped 10% in the year ended March from a year earlier. Chicken demand is also likely to increase by about 5% on the year to 5.1 million tonnes this year, according to the United States Department of Agriculture (USDA).
India's rise in corn imports is also attributed to its low local corn production as many of the country's producing states received little rain last year.
Output is estimated at between 18 million tonnes and 19 million tonnes in 2018-19, compared with a demand of as much as 20 million tonnes, CLFMA said. This is lower than local authorities' own production estimate of 27.8 million tonnes.
"That also means India, which was a net exporter until last year, is likely to sell just 500,000 tonnes this season, less than half of the 1.1 million tonnes it exported in 2017-18," the USDA said.
Oscar Tijakra, a Singapore-based senior grains analyst with Rabobank, opined that India will export less corn in the coming years. "The country could become a net importer if the growth rate of domestic corn output stays lower than the pace of consumption," Tijakra added.
The significant shortfall in domestic production is also being reflected in local corn prices, which surged 52% from a year earlier to a record in July, according to a report by the USDA.
Higher imports may also support benchmark futures in Chicago, which reached a five-year high in June on US planting concerns.
Rising local prices are also prompting some Indian feed manufacturers to buy wheat as a substitute, which is generally costlier than corn. Buyers have procured 300,000 tonnes to 400,000 tonnes of wheat this year, according to CLFMA.
State-run MMTC Ltd is also seeking offers from overseas suppliers for shipment from August to October, according to a tender notice on its website.
- The Hindu Business Line