India is likely to resume corn exports, as the ban lapsed on Wednesday (October 15, 2008) and domestic prices have dropped, according to government and trade officials.

A sufficient supply and limited flood damage to crops will likely help to restart corn exports too, and no one is seeking to continue the ban, government officials said.

In September, farm minister Sharad Pawar said the government would remove the ban if floods in the country's east had not hurt the crop.

Domestic prices fell about Rs 200 to Rs 8,700 per tonne in the past two months, said Vinay Gupta, a trader from the southern city of Nizamabad.

Corn exports were banned in July to cool corn prices and curb rising inflation, after major consumers such as the starch and poultry industries urged the authorities to help restrict inflation and short supplies.

India's corn exports represent only 3 percent of over 100 million tonnes of global trade, but it is an important supplier to Malaysia, Vietnam and Indonesia as the proximity means lower freight costs.

Before the ban, India benefited from China's absence from the market after Beijing curbed sales. Corn stocks in the US, the world's largest exporter, are also likely to fall to a new low in 2009.

Traders said a drop in global corn prices would hurt export deals.

Lower corn prices and freight rates will make US corn more attractive for Southeast Asian countries which have been importing from India, said Amit Sachdev, representative of the US Grains Council in New Delhi.