With maize (corn) prices soaring on demand from West, South and South-East Asia, buyers abroad are switching over to 100 per cent broken rice for animal feed in countries such as Vietnam, Indonesia and China. 

“There is a huge demand for maize from Bangladesh, Vietnam, Indonesia besides the Gulf. But prices have surged and availability is low since the new crop will arrive only after next month,” said Bimal Bengani, Managing Director of Kolkata-based Bengani Export Pvt Ltd. 

“Shipments of maize have slowed down after prices soared due to the Russia-Ukraine conflict. Instead, buyers from Vietnam and Indonesia are now seeking broken rice,” said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). 

Only small orders taken

“Exporters are accepting only small immediate orders that can be shipped in containers. From Kandla in Gujarat, maize is now going to Oman and other Gulf countries, as they are keen on maintaining the feed quality,” said Mukesh Singh, Co-founder of Mumbai-based MuBala Agro Commodities Ltd.

A major reason for domestic maize prices increasing is that the kharif crop has almost got exhausted. Singh said maize is currently quoted at ₹2,200-500 a quintal against the minimum support price of ₹1,870. Demand for maize has increased as supplies from Ukraine, which contributes 16 per cent of global exports, have been cut off with shipments from the Black Sea coming to a total halt after Russian troops entered eastern Ukraine on February 24.

Lukewarm demand

“Prices of maize delivered in Chennai for exports are ₹2,350,” said ACEA’s Prakash. In Gujarat, agricultural produce marketing committee yards such as Dahod, the modal, or rate at which most trades took place, was ₹2,300 on Monday.

According to the International Grains Council (IGC), Argentina quoted $329 a tonne last weekend, while Brazil offered maize at $364 and the US at $363 (f.o.b) free on board. Currently, benchmark corn futures on the Chicago Board of Trade are ruling at $7.44 a bushel ($292.83 a tonne).

“We shipped 250 tonnes of maize to Hong Kong some time back, but after that demand has been lukewarm,” Prakash said. 

“There are still some varieties of maize being shipped to Vietnam and Indonesia. A lot of maize is going to Bangladesh by road,” said VR Sagar, Director, Bulk Logix. Bengani and Singh concurred with his views. “Some exporters are expecting prices to increase to $420-430 and are holding off,” Sagar said. 

Exports feasibility

Maize is one of the agricultural products whose exports have been good this fiscal, increasing by over 30 per cent in the first 10 months. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), the export of other cereals, in which maize plays a major part, was 3.16 million tonnes (mt) valued at $1.74 billion during April-January this fiscal against 2.37 mt valued at $527 million in the year-ago period.

MuBala’s Singh said maize exports were feasible as long as prices were around ₹1,700-800 a quintal in the domestic market. Until December, Bangladesh was the top buyer purchasing 1.25 mt, while Vietnam purchased 0.95 mt. “In view of the high prices, there is good demand for 100 per cent broken non-sortex rice that is commanding a higher price,” said Prakash. The non-sortex rice will have yellow and black coloured grains.

Chinese purchase

“Even broken rice prices are now quoted near maize prices as there is a shortage,” said Sagar. Broken rice are commanding ₹2,100 a quintal and more. An exporter from Bengaluru said 100 per cent broken rice prices were at par with 25 per cent broken white rice. As per IGC data, 25 per cent broken rice price last weekend were $349 a tonne. 

According to APEDA data, China, which began importing Indian rice in the last fiscal after over three decades, bought 1.1 mt of rice during the April-December period of the current fiscal and Vietnam 0.6 mt. In October, the US Department of Agriculture said broken rice accounted for 97 per cent of India’s rice exports to China during January-August last year. 

“Broken rice has always been going to China and Vietnam over the last couple of years. This year, there is a shortage now,” Sagar said. “Exports of broken rice could also be a problem in view of the surge in price. We could manage when prices ruled at around ₹1,600-700,” he said, adding that the issue now was the grain’s availability. 

China began buying broken rice from India to use it as feed after corn prices surged last fiscal. Also, Beijing is required to build feed inventories as part of its plans to increase the production of pigs. Singh said it takes time to accumulate broken rice quantity for exports as they are done in bulk.  

A Delhi-based trade consultant said most of the broken rice was heading from the east coast ports such as Kakinada and Kolkata to Vietnam and Indonesia. 

“Maize prices will begin to decline once the arrival of the rabi crop beings,” Bengani said. 

“Rice prices will begin tapering off once Rabi arrivals begin. This will  happen around mid-May,” said Sagar. 

Freight advantage

Delhi-based exporter Rajesh Paharia Jain said India has freight advantage to export to China, the Netherlands and South Korea, which had been buying from Ukraine before the conflict intensified.

“It is a win-win situation for India after the Russian-Ukraine crisis. As India has a freight advantage of $70-80 a tonne and Chinese demand is up, it would be favourable to India. India maize export share to China might improve,” he said, adding that the coarse cereal exports might increase by 5-7 per cent in 2022-23.

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