India corn exports sharply decline on slack buying

 

 

Corn exports have dropped to a trickle as only a few buyers are out in the global market, as well as high moisture in the South Indian crop affecting the shipments.

 

Madan Prakash Murughasan, director of the Exim Rajathi India Pvt Ltd. says exports are not taking place at the pace as compared to last year. Currently, only the crop from Maharashtra is meeting the export standard, and shipments are taking place from there.

 

According to A. Rajkumar of the Alagendran Group of Companies, exporters are able to get corn at around Rs10,000 a tonne and if transportation, packaging, shipping and other charges are to be worked out, they hardly make any gain.

 

In addition, the recent rains have led to high moisture in the kharif crop that is being harvested. Murughasan says that the percentage of damage to the crop from Karnataka was also higher at eight percent against the permitted global standard of five percent.

 

Though corn is available at Rs850-Rs900 a quintal at the farm-gates, it is quoting higher at main markets. In Hyderabad, for example, it is ruling at Rs925. In New Delhi, it was quoted at Rs1,085 on Thursday (Dec 3).

 

Rajkumar predicts that larger exporters may stay away until mid-January because they are in no position to ship the consignments.

 

Trade sources said some of the exporters who had struck deals to export at US$205-US$215 were now facing problems and supply default is feared, as Thailand has emerged as a serious competitor.

 

With the ASEAN trade pact and better crop, it is helping the country in the sector. Buyers in Malaysia or Vietnam need not pay customs duty for corn imports even if they have to pay US$2-US$3 higher for Thai corn.

 

Traders said some business had been done with Malaysia, where buyers were offering US$224 at the most.

 

Rajkumar said arrivals from Andhra Pradesh were negligible, while Karnataka growers are reportedly holding on to their produce, partly due to the recent rains in southern India, which are also affecting shipment arrivals.

 

Kharif corn production has been estimated at 12.61 million tonnes against 13.90 million tonnes last year. Andhra Pradesh has emerged the main problem area for kharif corn with the crop being 34-percent lower at 1.25 million tonnes.

 

Corn exports have picked up since 2007-08, when 5.5 million tonnes were shipped out, mainly on demand from Southeast Asia and the Far East. Last year, exports are estimated to have touched 3.5 million tonnes.