September 21, 2010

 

India may have bumper corn crop

 

 

India may have a record crop because of above-average precipitation, increasing exports, according to Adani Enterprises Ltd., the country's biggest non-state trader of farm goods.

 

Production may exceed 20 million tonnes in the year to June 2011, beating 19.73 million tonnes, the highest-ever, gathered in 2009, Atul Chaturvedi, president of Adani said.

 

Corn rallied to near a two-year high on the Chicago Board of Trade on concern that US output may fall on lower yields and as drought in Russia delays planting of the winter-grains crop. Shipments from India will certainly top 500,000 tonnes in the marketing year ending September 30 as the nation may have a surplus of 2-3 million tonnes, Chaturvedi said.

 

"With prices being what they are, India definitely gets a bigger opportunity," he said. "There will be enough surplus."

 

Corn may reach US$5.75 a bushel as production falls in the US, Macquarie Group Ltd. said in a report September 17. Russian farmers have sown 39% less land with winter grains from a year ago because of dry weather.

 

US corn yields will fall to 162.5 bushels an acre, down from 164.1 bushels forecast on August 20, Professional Farmers of America said September 17. The revised forecast is in line with the outlook from the USDA.

 

Russia banned grain shipments until after the next harvest because of drought, tightening global wheat supplies and lifting demand for corn as a substitute.

 

"You sure have a good recipe for Indian crops' success in the world market," Adani's Chaturvedi said. "We are having a good crop, be it corn, cotton or soy, and the world crops aren't all that great with Russia and Ukraine having their worst ever drought and Brazil facing a bit of dry weather."

 

India, the world's second-biggest wheat grower, may harvest 82 million tonnes, a record for a fourth straight year, as above-average rains raise water levels in major dams and lakes, Farm Secretary P.K. Basu said last week.

 

"India will be the beneficiary of the tightness in global corn market," Krishna Reddy, an analyst at Way2Wealth Brokers Ltd., said. "The lower freight charges to Southeast Asia will also work to India's advantage."

 

India sells corn mostly to buyers in Malaysia, Vietnam and South Korea.