The Hindu Business Line : Non-availability of ships hits corn exports

CORN (maize) exports from the country have slowed down as global buyers are delaying taking delivery of their consignments due to non-availability of ships.

On the other hand, a higher aflatoxin level is proving to be a deterrent in entering new markets, according to trade sources.

"Shortage of ships is forcing buyers to delay lifting of their consignments. Besides, the avian influenza that has hit South-East Asia also affected sentiments," a trading firm official, who did not wish to be identified, told Business Line.

"Currently, we are trying to fulfil our contracts and we think it will take a month before the buyers come back to us," he said.

The export market is still bullish, though no new contracts have been signed, according to the official. Domestic prices, however, have witnessed a fall during the last fortnight.

"As far as the sentiment is concerned, the market continues to be bullish. Our export prices are still $142-143 (approximately Rs 6,450) a tonne f.o.b," the official said.

Domestic prices, on the other hand, have slipped to Rs 5,500 a tonne from Rs 6,000 a fortnight ago.

Corn exports are taking place after several years and a record 12 million tonne (mt) kharif crop has aided it. On the other hand, China, a major exporter in the global market, has reported a four mt fall in the crop to a little less than 114 mt.

So far, around 1.75 lakh tonnes have been contracted for exports. Of this, nearly one lakh tonnes have been shipped, most of it as small consignments. The consignments have mainly headed to Far-Eastern and South-East Asian countries.

However, other trade sources said export demand had stagnated. "Our corn aflatoxin levels have been reported to be high and it is a main hurdle in getting new markets," they said.

Some countries are demanding corn with aflatoxin level of less than 20 parts per billion (PPB). "But our corn has an aflatoxin level higher than this," they said.

Aflatoxins are formed by mouldy growth in peanuts, cotton, corn, nuts and dried fruits in warm humid conditions. These toxins are carcinogenic if consumed over a period of time. Therefore, in some of the developed economies, especially in the European Union and the US, a tolerance limit is set.

The sources said domestic prices could decline further if shipments are delayed, while rabi crop arrival could also add to the pressure.

"We see the export market under pressure since Thailand, which was not in a position to offer corn earlier, has also joined the countries that can export," they said.

Earlier this year, the trade had estimated a demand of five lakh tonnes for corn exports.

"Rising freight rates will surely bring back demand for Indian corn. We still enjoy a freight advantage of $10 a tonne," they said.

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