September 16, 2010

 

India exports new-crop corn, China to buy 1.5 million tonnes

India has sold about 100,000 tonnes of new-crop corn to Southeast Asia, while China's imports this year could climb to 1.5 million tonnes as global prices rally on prospects of strong demand and tight supplies.

 

India is benefiting from a rebound in production after ample monsoon rains and strengthening global prices <Cc2>, which have climbed to their highest in nearly two years on the tightest US supplies in 15 years.

 

"There has been good buying interest coming from Malaysia and Vietnam as Indian prices are cheaper than South American offers," said one trader.

 

US corn futures rose Wednesday (Sep 15), extending gains for a fifth straight session, in a rally that has carried prices near two-year highs on lowered expectations of the US crop now being harvested.

 

Strong demand for US corn from countries such as China for use as livestock feed following Russia's ban on grain exports until well into next year has underpinned a rise of more than 40 % in corn futures from a late-June low.

 

Indian corn was traded between US$240 and US$250 a tonne, including cost and freight, for shipment in October and November, compared with Argentine corn on offer at around US$270 a tonne.

 

India's 2010/11 corn exports are expected to more than double to around 2.5 million tonnes on strong demand, traders said, up from around one million a year ago.

 

India, which primarily supplies to Southeast Asia, Sri Lanka, Bangladesh and Nepal, competes with US and South American corn.

 

Another trader said feed millers were locking in supplies in anticipation of strong demand and higher prices. "People are trying to cover as much as they can from India as global prices are rising," he said.

 

US farmers will harvest 13.16 billion bushels of corn this fall, slightly less than traders expected, and high grain demand will shrink the corn stockpile to its smallest in seven years, the USDA said Friday (Sep 10).

 

"The corn crop is in good condition and free from any major pest and insect attacks," said Amit Sachdev, India representative of US Grains Council.

 

India's key monsoon turned normal this year after the last year's driest season in nearly four decades. The June-September season began on a weak note, but later revived pushing coverage for main summer crops like corn and oilseeds.

 

In neighbouring China, a senior executive at COFCO said the country's imports could hit 1.5 million tonnes this year, since it has imported about 600,000 tonnes of corn already and another 700,000 tonnes are booked and on the way. A US analyst also said China was likely to import around one million tonnes of corn next year to meet rapidly expanding demand for feed grain.