December 15, 2011
India gets million-tonne corn export deals to Southeast Asia
For the first two months of the season, India has won a one-million-tonne corn shipment deals to Southeast Asia, signifying a robust start amid congestion fears at domestic ports that could later slow down overseas sales.
"We have contracted to export one million tonnes for January delivery and most deals have been struck in the range of US$240-$250 per tonne FOB (US$6.60-$6.81 per bushel)," said Vijay Shrishrimal, managing director of Mumbai-based exporter K.N. Resources Pvt Ltd.
He said India could export about 2.5 million tonnes of corn in 2011/12 year which started on October 1.
A trader from Nizamabad, a trading hub in the southern state of Andhra Pradesh, and a leading New Delhi-based trade and industry official said India could export as much as three million tonnes of corn in 2011/12.
India's share of world corn trade of around 90 million tonnes is small, but the nation is a significant supplier to buyers such as Malaysia, Vietnam and Indonesia that seek small parcels for prompt shipment.
India, Asia's second-largest grower of corn after China, exported about 2.8 million tonnes of corn in 2010/11, the trader and the industry official said.
India normally exports 2-3 million tonnes of corn but shipments fell to a meagre 700,000 tonnes in 2009/10 after the worst drought in nearly four decades ravaged farms.
"Demand is buoyant, prices are attractive and the rupee is lower. Exports could have been higher this year but there are bottlenecks at ports and, to some extent, this may hobble exports," Shrishrimal said.
The rupee is down 18.4% from its year-high in July and hit a fresh record low on Wednesday (Dec 14).
Shrishrimal said Indian corn is about US$40 a tonne cheaper in Southeast Asia than cargoes from the US, the world's biggest supplier.
"The demand is so far robust in southeast Asia. As of now, we have not seen any major impact of the European debt crisis on demand but there could be some impact if the crisis persists. Global prices are also attractive," he said.
Benchmark corn prices in Chicago have risen 6.7% to US$5.96 a bushel this year.
India itself consumes 15-16 million tonnes of corn annually. Domestic consumption is expected to rise due to increasing demand for poultry products as food habits change, pushing up meat consumption in the world's second-most populous nation.