November 29, 2006

India dithers on corn export ban

Disagreement among officials in the Indian government has been delaying a ban on corn exports, said an official adding such a move was inevitable as demand in the domestic market would exceed supplies.

Corn production could reach 12.75 million tonnes in the crop year between October 2006 and September 2007, official said. Demand during this period could reach 14 million tonnes.

India earlier this month struck its first corn export deals in many years, taking advantage of shrinking global supplies, selling about 150,000 tonnes of corn to Indonesia, Malaysia and Sri Lanka.

The spurt in exports have boosted domestic corn prices and cut into supplies, especially for the poultry sector, a major consumer.

The commerce ministry has been considering a ban on corn exports. The agriculture ministry however, feels otherwise. Poultry firms have requested a ban and called for duty-free imports of corn. India imposes a 15-percent import duty on corn.

They were trying to convince the agriculture ministry to take a decision, said the official.

Manish Kumar Gupta, managing director of Gujarat Ambuja Exports said a ban could be in place within two weeks.

With one round of corn exports already over, a second could be in place if a ban was not imposed soon, he added.