January 30, 2008

 

India may face 2 million tonnes corn shortage on feverish export pace

 

 

With the last corn harvest completed just three months ago, India may need to import up to 2 million tonnes of corn by the middle of the year as brisk exports thin out domestic supplies.

 

Manish Gupta, managing director of Gujarat Ambuja Exports, one of the largest domestic consumers of corn and exporters of processed corn products, said that if the fast pace of exports continue, India will need to import corn by May or June.

 

Gupta estimated that the country could face a shortage of up to 2 million tonnes.

 

Amit Sachdeva, India-based representative of the US Grains Council, said that with around a million tonnes to go out, the industry might be left with nothing.

 

The recent surge of US and South American corn prices has given attractive opportunities for Indian corn exporters to sell in Asian and Middle East markets which were eyeing for cheaper alternatives.

 

Indian exporters have struck deals to export around 500,000 tonnes of corn since the end of September, and aim to find buyers for a similar quantity by March.

 

Amol Sheth, president of the All India Starch Manufacturers' Association, said that his main concern is the availability of corn which looks threatened on the rate of exports.

 

However, exporters assuaged fears, saying stocks were still plenty and exports from India have in fact dulled in momentum in the past week as international freight rates for US corn have declined.

 

The bulk of sales from India was around US$250 a tonne, free on board, while local corn prices are ruling at about US$215.75 a tonne, an increase of 20 percent since September.

 

Sheth pointed that it was too early to determine whether outbreak of bird flu in West Bengal would reduce domestic demand for corn.

 

India estimates around 16 million tonnes of corn harvest this year.