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India’s growing affluence is seeing its population turn more carnivorous, leading it to import more corn for chicken-feed than ever before.
“Corn purchases, by Asia’s second-biggest grower, are set to climb to a record 1 million tons in the year starting in November. Most supplies are likely to come from Myanmar and Ukraine, said Jaison John, General Manager for procurement at Suguna Foods Pvt, a top poultry producer.
India’s growing population, rising disposable incomes and changing food habits are boosting the consumption of non-vegetarian food, according to CLFMA, an association of Indian feed manufacturers. Per capita incomes jumped 10 per cent in the year ended March from a year earlier. Meanwhile, chicken demand is likely to rise by about 5 per cent on the year to 5.1 million tons this year, according to the United States (US) Department of Agriculture.
Another reason for the increased imports is India’s own corn production, which has been low after several producing states received scant rains last year. The output is estimated at between 18 million tons and 19 million tons in 2018-19, compared with demand of as much as 20 million tons, CLFMA said.
This is lower than the Governments own production estimate of 27.8 million tons.
“That also means India, which was a net exporter until last year, is likely to sell just 500,000 tons this season, less than half of the 1.1 million tons it exported in 2017-18,” the USDA said.
“I think India will export lesser and lesser corn in the future. The country could become a net importer if the growth rate of domestic corn output stays lower than the pace of consumption, said Oscar Tjakra,” senior grains analyst at Rabobank in Singapore.
Price Spikes
The significant shortfall in domestic production is also being reflected in local corn prices, which surged 52 per cent from a year earlier to a record in July, according to a report by the USDA.
Higher imports may also support benchmark futures in Chicago, which reached a five-year high in June on US planting concerns.
Rising local prices are also prompting some Indian feed-manufacturers to buy wheat as a substitute, which is generally costlier than corn. Buyers have procured 300,000 tons to 400,000 tons of wheat this year, according to CLFMA. State-run MMTC Ltd is also seeking offers from overseas suppliers for shipment from August to October, according to a tender notice on its website.
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