October 17, 2011
East Asian buyers procure 500,000 tonnes Indian corn
East Asian buyers for the last few weeks snapped 500,000 tonnes of Indian corn for shipment between November and January, trading executives said Friday (Oct 14).
Aggressive purchases within weeks of the start of India's harvest help meet East Asian demand amid flooding in Thailand and tight US supply, which is also more expensive.
India's corn is among the world's cheapest. On a delivered basis, it may be US$30-40 cheaper than US corn.
Traders said the latest offers are US$255-258/tonne, free on board.
India's new crop corn has mostly traded in a US$248-285/tonne, FOB, for shipment to Malaysia, Vietnam and Indonesia, while at least one cargo was sold to South Korea.
Traders in India confirmed that sales of at least 350,000 tonnes of corn in bulk and close to 150,000 tonnes in containers have already been made, for shipment over the next few months.
Demand is strong and India may export 2.5-3.0 million tonnes of corn over the next one year, an executive with a global commodities trading company said.
He said even old-crop corn from earlier sale contracts is still being shipped at US$290-310/tonne, FOB.
At least 150,000 tonnes of Indian new-crop corn was traded around US$250/tonne, FOB before prices rose due to heavy rains in the southern states of Karnataka and Andhra Pradesh.
Recent offers for Indian corn, delivered at Kakinada port, were INR11,400-11,600 (US$233-237) per tonne but if rains increase moisture and supply of export-quality corn tightens, local suppliers may push for higher prices, an exporter in Mumbai said.
India doesn't make large-scale shipments like the US of 55,000 tonnes or higher each but its supply is useful to control the cost of making animal feed in the region.
The USDA has revised lower the US corn output forecast due to lower yields. Production this marketing year is now expected around 316 million tonnes, slightly less from a year ago. US corn exports are likely to fall 13% to 40.64 million tonnes, USDA said.
Traders expect this to be offset partly by Ukraine, India and countries in central Europe.
Non-US corn trade will likely to rise by 25% to 53.5 million tons in 2011-12, USDA said.