India’s corn (maize) exports will likely drop by 10 per cent during 2023-24 as global production is estimated to rise to over 1,200 million tonnes (mt).

According to the US Department of Agriculture, India’s maize exports will likely drop to 3.6 mt from 4 mt. Data from the Agricultural and Processed Food Products Export Development Authority (APEDA) show that corn exports in 2022-23 declined to 3.45 mt from 3.69 mt in 2021-22. The value of exports was, however, higher at $1.12 billion against $1.02 billion the previous fiscal. 

Short window

“We recently exported corn at $265 a tonne. Prices have dropped sharply. We hear corn from South America is available at $255 for July in Vietnam,” said M Madan Prakash, President, Agricultural Commodities Exporters Association. 

If the South American contracts are signed in July, buyers in Vietnam could get corn from August. “Only a short window is available for corn exports and we are trying to make use of it,” Prakash said. 

The Agricultural Marketing Information System (AMIS) of Food and Agricultural Organisation (FAO) said global corn production is set to rebound in 2023, rising by 4.2 per cent from the 2022, mostly resting on larger harvests in the US, Brazil, and the EU.

Price forecast

The USDA said the crops are higher in Brazil, India and South Africa. The US agency has pegged global output at 1,222.76 mt, while AMIS has estimated it at 1,212 mt. 

US research agency BMI, a Fitch Solutions unit, said it expects second-month corn futures to trade at an average price of $6.10 a bushel ($240.10 a tonne) in 2023, a downsizing of 6.2 per cent from the forecast it made in March-end.

Currently, maize is quoted on the Chicago Board of Trade for cash at $6.36 a bushel ($251), while July futures are ruling at $6.18 ($239.5).

The global surplus production is having an impact on corn prices in India too. Data from Agmarknet, a unit of the Agriculture Ministry, show that the national weighted average price of corn is ₹1,867 a quintal against the minimum support price of ₹1,962.

Stocked up

A record maize production of 35.91 mt has also added to Indian farmers’ woes. “There is plenty of corn this year in India. Processors such as starch makers, exporters and trading houses have bought huge quantities since prices at farm level are around ₹1,700,” said an exporter. 

The exporter who visited the Gulab Bagh Mandi, one of the biggest for corn, said the coarse cereal is being stocked up in the area as it was hardly 200 km from Bangladesh border. 

BMI said in the short-term, the uncertain future of the Black Sea Grain Initiative will represent the largest upside risk to its price outlooks . 

“... we have identified bearish sentiment in the crude oil market, mainland Chinese demand, and an expected global economic slowdown as the principal risks on the downside,” the research agency said.

Projecting global production to rise by 7.2 per cent year-on-year to 1,232.9 mt next trade year, BMI said the global balance will move from deficit in 2021-22 to surplus.

Ending stocks are seen higher at over 300 million next trade year, adding to the bearishness.