Trouble spells for corn exporters as Vietnam rejects shipments

Corn (maize) exporters are up against odds as buyers, particularly from Vietnam, are rejecting shipments on grounds of presence of pests or high moisture.

“At least 2-3 vessels with Indian corn have been rejected on these grounds,” said an exporter source in the South. “But the fact is that by the time consignments reached the port of landing, prices dropped and therefore, they were rejected,” the source said.

“Vietnamese buyers are demanding re-fumigation of corn shipments at the port of landing. It is not economically viable for exporters to do re-fumigation there. Then, buyers raise the issue of pests in the cargo. With all documents being with buyers, exporters can do little,” said Mr A. Rajkumar of Chennai-based Alagendran Group of Companies that ships corn.

BEETLE PRESENCE

According to reports from Veitnam's Hai Phong port, shipments totalling 45,000 tonnes of Indian corn have been rejected for the presence of Khapra beetle. “That is a trick buyers use to avoid our shipments,” said the exporter source.

“In one case, a Singapore trader bought our corn shipment at $313 a tonne. By the time the consignment reached, prices had dropped to $272. The buyer then demanded refumigation, knowing well the exporter cannot do it,” said a South-based exporter.

“Luckily, the exporter found buyers in Indonesia. Now, how do you explain that,” said the exporter. He, however, conceded that some exporters were shipping out corn with a higher moisture content, between 14 per cent and 17 per cent.

Currently, Indian corn is being offered at $278 a tonne c&f with 14 per cent moisture. In contrast, corn from South America with 12 per cent moisture is quoted at $285-290 a tonne c&f. In the domestic market, maize is ruling at Rs 11,800-12,000 a tonne.

FUMIGATION

“Fumigation can be done before the consignment is exported. The corn has to be stored in a warehouse, fumigated and then shipped out after 72 hours,” says Mr Madan Prakash, Director of Rajathi Group of Companies that exports agricultural produce.

But such fumigation cannot be done by exporters who ship out small quantities. Such exporters carry out fumigation in the container which results in insects being retained in the consignment.

Exporters say that the problem is that buyers play the fumigation game to reject shipments bought when prices were high.

“This problem has been there for the last two years. Last year too, Vietnam rejected some 60,000 tonnes to one lakh tonnes of corn. But they were diverted to Indonesia or Malaysia,” said Mr Prakash.

The problem currently for Indian corn exporters is that South America is offering a stiff competition with quality consignments.

“In the last couple of weeks, we have been finding it tough to get buyers,” said Mr Rajkumar.

“We can even divert our corn shipments to Taiwan provided aflatoxin does not set it. For Taiwan, it has to be below 50 parts per billion (ppb), but high moisture can lead to a higher aflatoxin of 120 ppb,” said Mr Prakash.

Currently, Malaysia is buying corn from India. “But that too has invited problems after the rupee depreciated three per cent. Some even threatened to cancel orders. Otherwise, corn is being shipped from the Mangalore port to the Gulf,” said Mr Rajkumar.

“With Indonesian domestic crop likely to last till January only, demand is expected to emerge from Jakarta from February. Until then, exports could be a little slack,” said Mr Rajkumar.

According to the first advance estimate of crops put out by the Agriculture Ministry, kharif maize production is projected lower at 15.86 million tonnes against 16.32 million tonnes last year.

> mrsubramani@thehindu.co.in

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