The Hindu Business Line : Corn exports gather pace on Far-East, S-E Asia demand

“Corn exports have picked up from the third week of January. There is a demand from countries such as Vietnam and Malaysia,” said Mr A. Rajkumar of the Chennai-based Alagendran Group of Companies.

“Vietnam is buying our corn at $200-202 f.o.b. Shipments are showing signs of picking up,” said Mr Madan Prakash, Director of Rajathi Group of Companies, that is involved in exports of various agricultural products. “We are also getting enquiries from the Gulf,” he said.

Baltic Dry index up

With freight rates tending to increase, Indian corn exports are proving to be competitive with shipments from the US and South America. Last week, the Baltic Dry Index, which measures the cost of moving bulk commodities through sea, increased 58 per cent. The average cost of hiring a vessel has doubled since the second week of January and it is currently at 15-week high.

US corn is quoting around $175-177 f.o.b.

“There are also problems of quality with consignments from countries such as Brazil,” said Mr Rajkumar.

Crop output

The corn crop in Brazil has suffered from dry weather and production this year has been estimated at 50.3 million tonnes from the initial estimates of 52.3 million tonnes. The crop in Argentina, too, is believed to have been affected by dry weather.

“Buyers are even complaining of higher moisture content in the US corn,” said a Chennai-based exporter.

The current export prices are, however, lower than $225 a tonne fetched in the same period a year agoand $300 during June-July before the Union Government banned corn shipments on July 16. The ban was lifted on October 15 but exports are seen picking up only now.

“We expect Taiwan to start buying Indian corn soon,” said Mr Prakash, while Mr Rajkumar said even Indonesia could be seen buying the coarse cereal soon.

Asked about Indonesia targeting to treble its exports to one million tonnes, both said it would not affect Indian exports.

“Indonesia has many islands and there could be some which could buy our corn,” said Mr Rajkumar.

Current exports

“Our reliability vis-À-vis Indonesia could stand us in good stead,” said Mr Prakash.

Currently, the trade is believed to have contracted nearly one lakh tonnes for export.

“A multi-national shipped 20,000 tonnes to Vietnam recently,” said trade sources.

Last year, nearly 30 lakh tonnes of corn were exported. This year, however, the shipments are seen lower and the trade is unwilling to make any estimate.

“It is a hand-to-mouth existence every where, even in India,” they said.

Domestic demand

Meanwhile, in the domestic market, corn offtake has been tardy with the poultry sector being affected by the financial crunch. “The poultry sector is only buying what it needs for the time-being,” trade sources said.

Corn is currently available at around Rs 8,200 a tonne in markets nearer to the growing areas, while it is being quoted at around Rs 9,000-9,150 a tonne near ports. This is against the minimum support price of 8,400 fixed by the Centre.

“Corn prices are 14 per cent higher than the rates during the same period a year ago,” say trade analysts.

During the kharif season, corn production has been estimated at 13.04 million tonnes against 15.15 million tonnes in the previous kharif. Overall corn production during 2007-08 was estimated at a record 19.31 million tonnes.

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