Indian corn (maize) exports are on the rise as the coarse cereal is enjoying an advantage in freight charges in Southeast and West Asia.
The export demand has resulted in domestic prices ruling higher than the minimum support price (MSP) of INR 1962 a quintal, traders, and exporters say.
Rise hits parity
Though Indian corn is quoted at USD 310 a tonne free-on-board (FOB) compared with USD 290, the low freight charge is giving it the market share in countries such as Vietnam, Malaysia, and Oman.
“We are exporting to Vietnam and Malaysia at around USD 310 FOB. Domestic prices are ruling high, and we are getting deliveries for export in Mumbai at INR 23500 a tonne and in Chennai at INR 24500,” said M Madan Prakash, President, Agri Commodity Exporters Association (ACEA).
“Corn prices have increased in the past month, affecting our parity. Prices have increased from INR 18000-20000 a tonne to over INR 21000. Also, the moisture in some of the arrivals is high, at 15 to 17 percent,” said Mukesh Singh, Director of Mumbai-based MuBala Agro.
Emerging major player
According to data from Agmarknet, a unit of the Agriculture Ministry, the weighted average price of corn currently is INR 2114 per quintal, against INR 1775 a year ago.
“Stockists are currently buying, and arrivals are good in the domestic market,” said ACEA’s Prakash.
“At least 3.5 lakh tonnes have headed towards Vietnam this fiscal. We are a major player in the region,” said Delhi-based exporter Rajesh Paharia Jain.
During the current fiscal, 19.53 lakh tonnes (lt) valued at USD 653.36 million have been exported during the April-November period of the current fiscal. In 2021–22, 36.90 lt were exported at a value of USD 1.02 billion.
Bangladesh is the largest importer of Indian corn during the period, buying 11.5 lt, while Nepal purchased 2.7 lt and Vietnam 2.3 lt during the period. Queries have also started from Sri Lanka.
Indian corn prices have gained in tandem with global prices, ruling near the highs witnessed in November 2022. Currently, corn futures on the Chicago Board of Trade (CBOT) are quoting at USD 6.8 a bushel (INR 22,100 a tonne).
Global corn prices have gained on supply chain disruption, rising input costs, and higher demand. The ongoing Ukraine war, late plantings in the US, and dry weather in South America are causing concern in the market, particularly since Kyiv contributes 15 percent to the export market.
According to the Food and Agriculture Organisation, global corn production is estimated to be 4.7 percent lower in 2022–23 at 1156 million tonnes (mt) against 1211.8 mt in 2021–22. Supply is projected 2.5 percent lower at 1461.1 mt and ending stocks will likely be over 7 percent lower at 283.5 mt.
India has been aided by a record kharif maize production of 23.10 mt compared with 22.63 mt last kharif season.
Source: The Businessline