April 9, 2004
Asian Feed Millers Turn To Indian Corn
Demand for Indian corn has risen substantially in recent weeks as a rare combination of factors make grain from the sub-continent more attractive.
The absence of Chinese corn exports, the high price of US corn, and rising global prices of soymeal have all worked in tandem to pushed Asian feedmillers to source out corn from India.
"Demand for our corn continues and so far, contracts for five lakh tons are reported to have been signed," an exporting firm official, who did not wish to be identified.
Of this, at least two lakh tons are expected to have been shipped out, while exporters expect demand for another five lakh tons.
"Corn exports are likely to touch 10 lakh tons," the official said.
Lower soybean crop in the US, Brazil and Argentina and its consequent effect on soymeal prices are mainly driving the demand for corn from the country. Though there is demand for soymeal too, it is priced higher than corn.
"Currently, our corn is quoted at $154-155 a ton f.o.b," the official said.
In comparison, soymeal prices are quoted at $344 a ton f.o.b Kandla. Even feed wheat prices are quoted higher than corn by a couple of dollars.
"US corn costs $210-220 a ton c&f South-East Asia," he said.
"Moreover, the US corn is being diverted for ethanol production and hence, availability from that country is tight. On the other hand, China, the other major exporter, has no surplus," he said.
The Chinese crop has been hit by floods as a result of which it is down by at least four million tons (mt) to 114 mt.
Usually, the entire corn produced in the country is consumed by the poultry and starch sectors.
But this time, a record corn crop of 12.80 million tons during the kharif season has left some surplus for exports.
Besides, the rabi crop is also expected to be good with the acreage rising by one lakh hectares to seven lakh hectares.
"Rabi corn from Andhra Pradesh could hit the market anytime from now," the official said, adding that domestic corn prices were, however, ruling firm at Rs 6,300 a ton.
After a long gap, Indian corn has hit the global market.
Demand has come especially from Indonesia, Vietnam, and South Korea besides the entire West Asian region, Sri Lanka and Bangladesh.
Though corn exports had slowed down during January-February on the outbreak of avian influenza, demand has picked up since last month as poultry sector has begun to recoup.
"Demand from the feed sector is back and we have enough stocks to meet it," the official added.