The Hindu Business Line : Maize exports banned till October 15

New Delhi, July 3 Bowing to pressure from the poultry and starch industries, the Centre has banned export of maize from the country. The ban, to take “immediate effect”, will be in place till October 15, according to a notification issued by the Directorate-General of Foreign Trade (DGFT) here on Thursday.

Domestic prices of maize are currently ruling at Rs 950-1,000 a quintal, a jump of around Rs 200 over last year at this time. Poultry farmers and starch manufacturers have for quite some time been seeking restrictions on exports, which they hold as being primarily responsible for the price increase.

Price drive

The country is reported to have exported about 2.5 million tonnes (mt) so far during the 2007-08 season (October-September), as against 0.5 mt in 2006-07. Exports have been driven mainly by skyrocketing international prices, exacerbated by recent floods in the main corn-growing mid-west regions of the US.

Lower freight costs in comparison to the US and China have made India an attractive origin for importing countries such as those in South-East and West Asia. Maize is being exported from India at about $300 a tonne, free-on-board, which is around the rate at which the commodity is quoting now at the Chicago Board of Trade.

Remunerative prices have, in turn, encouraged farmers to grow more maize. During 2007-08, the country produced a record 18.54 mt, with half of it coming from Andhra Pradesh, Karnataka and Bihar.

Sowing outlook

In the current year, kharif plantings have so far been 38 per cent more than last year’s corresponding coverage. Whether the export ban would dampen the enthusiasm to sow remains to be seen.

The ban has been imposed up to October 15, by which time the new kharif crop would arrive in the market. As of now, the DGFT has disallowed shipments even against pending contracts for which letters of credit have been opened under the “transitional arrangements” of the Foreign Trade Policy.