October 12, 2010

Higher corn prices to spur India's export deals

A surge in global corn prices and expectations of a drop in domestic rates will help India seal more export deals in the coming weeks, traders and analysts said on Monday (Oct 11).

Benchmark corn prices in Chicago surged as much as 45 cents to hit a high of US$5.73-¼ a bushel, the highest since September 24, 2008, and trading limit up for the second straight day.

Traders believe that more export deals will be signed in the next 10-15 days with the rise in global prices and likelihood of a drop in domestic prices. Local prices were expected to drop to Rs9,500 (US$214) per tonnes within the next 15 days from Rs10,400 (US$235) now due to the arrival of the summer-sown variety.

India, started its new-crop corn export marketing season with sales of about 100,000 tonnes to Southeast Asia.

India's share in the estimated 90 million tonnes global corn trade is small, but Southeast Asian countries such as Malaysia, Indonesia, and Vietnam often seek prompt shipments for feed use from the South Asian neighbour.

Helped by a rebound in output due to plentiful monsoon rains, India is expected to export 2-3 million tonnes of corn in the new year that began in October against 1 million tonnes in 2009-10.

Last month, the government forecast summer-sown corn output at 14.06 million tonnes, up from 12.00 million tonnes.