June 14, 2011
India's record corn crop may lift exports, capping global costs
Corn production in India, Asia's biggest grower after China, may surge to a record for a second year as high prices and normal rains spur farmers to increase planting, potentially boosting exports.
Output from the monsoon-sown crop may climb by as much as 7% from the all-time high of 15.9 million tonnes in the year ending June, Gagan Gulati, head of the grains business at Olam International Ltd.'s Indian unit, said. That may raise exports from about 2.4 million tonnes this season, according to Atul Chaturvedi, chief executive officer at Adani Wilmar Ltd., the nation's biggest farm-goods trader.
Increased Indian supplies may help cool a rally in corn, which has gained 86% in the past year on signs world inventories will drop, and cap global food costs that reached a record in February. Supplies before the 2012 harvest from the US, the largest producer, were estimated by the government at the lowest since 1996, boosting expenses for meat producers such as Tyson Foods Inc. and ethanol-makers including Poet LLC.
"Higher supplies from India will definitely cap global prices," Vijay Iyengar, managing director of Agrocorp International, a Singapore-based commodity trading company, sai. "There is a lot of demand for Indian corn in some Asian countries."
Livestock feed-makers in Malaysia, Thailand, and Indonesia are among the buyers of Indian corn as they seek substitutes to supplies from the US and Latin America. Stockpiles around the world will be 117.44 million tonnes before this year's Northern Hemisphere harvests, the USDA said last week. Those inventories will drop next year to 111.89 million tonnes, according to the US agency.