Pricey India corn keeps buyers away

India’s corn (maize) shipments have slowed down as overseas buyers are seen shifting to the cheaper origins in South America and the US. Also, the anticipated decline in kharif production on drop in acreage could result in lower availability for shipments.

“Exports are not viable right now as the international prices are lower. Indian corn is expensive by about $40 per tonne over the South American origins and there are no shipments happening now,” said Raju Choksi, Vice-President, Anil Nutrients, a firm that also exports the cereal. The higher output in countries such as Brazil, Argentina and the US has pulled down corn prices in recent months.

Choksi expects the

kharif output this year to be lower by 10-15 per cent on decline in acreage. Delayed and deficit monsoon has hit the kharif acreage and till August 1, corn was planted in about 57.85 lakh hectres, about 17 lakh hectares lower than the last year.

Lower planting States such as Karnataka and Punjab have seen a lower planting this year. Besides deficient rains, the shift by farmers to other crops such as cotton and pulses also contributed to lower acreage, Choksi said, while maintaining that prices would largely remain stable.

Maize contract for August delivery were trading marginally lower on NCDEX at ₹1,161 per quintal, while that of October delivery were trading at ₹1,201.

The US Department of Agriculture (USDA) has projected the Indian corn output for 2014-15 at 21 million tonnes, down from 23 million tonnes last year. According to the third advance estimates by the Agriculture Ministry, corn output for 2013-14 stood at 24.19 million tonnes.

Trade analyst Tejinder Narang expects corn output to decline to around 22 million tonnes this year. “But that’s tentative. The rabi crop in Bihar can make up,” he added.

Narang said there are no takers for the Indian corn on huge price disparity. From the eastern port of Kakinada, corn from Andhra Pradesh is quoted at $248 per tonne, while that of Bihar is priced at $228 per tonne on FOB basis. As a result, the exports for 2014-15 starting October could drop to 2.5 million tonnes against 3.5 million tonnes in 2013-14, Narang added. India’s maize exports have more than doubled in the past few years from 1.9 million tonnes in 2009-10 to a high of 4.8 million tonnes in 2011-12. The Indian maize is largely exported to the Far East nations, where it is used for livestock feed. The USDA also expects India’s maize shipments in 2014-15 to shrink to 2.5 million tonnes against the current year’s estimated 3.5 million tonnes.

GM crops Narang attributed the price disparity between the Indian and the large US, Brazilian and Argentina crops to the genetically modified (GM) crop grown in these countries.

“The yields of GM corn vary between 5 to 10 tonnes per ha, while in India the non-GM crop yields 2.4 million tonnes per hectare,” Narang said, adding that the consuming world does not differentiate between the GM and non-GM crops.