Maize exports from India down to a trickle

Maize (corn) exports from India have dropped to a trickle as high domestic prices have made its shipments uncompetitive in the global market.

“Brazil is shipping to destinations, such as Vietnam, at a very competitive price of $320 a tonne cost and freight. But, over here, domestic prices are ruling higher, making exports unfeasible,” said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). 

Bihar rabi maize crop has begun arriving in the market, resulting in prices dropping a tad, he said.

Quality concerns 

“Rain in the areas where maize was harvested has raised concerns over the crop quality,” said Mukesh Sigh, Director of Mumbai-based MuBala Agro. 

“We have not dealt with corn recently in view of high domestic prices,” Prakash said. 

According to the International Grains Council, feed-grade maize is currently quoted at $293 and $288 a tonne from Brazil and Argentina, respectively. On the Chicago Board of Trade, benchmark corn futures are currently quoted at $7.77 a bushel ($305.88 a tonne). In April, futures had touched a 11-year-high of $8.1.

However, trade analysts say the prices are higher than normal as supplies from Russia and Ukraine have been affected due to the war between them, while supplies from Brazil and Europe have been affected by dry weather. In addition, the lower area under kharif maize is worrying the market. 

Kharif area down

As of July 8, the area under kharif was down at 31.84 lakh hectares (lh) against 41.63 lh in the same period a year ago. The area has declined in view of a deficient monsoon in June.

According to the Ministry of Agriculture’s data, the weighted average modal price (the rate at which most trades take place) of maize is ₹1,933 a quintal. However, prices in Bihar, Maharashtra, Karnataka, and Andhra Pradesh are ruling around ₹2,600 a quintal.

“Maize is offered at ₹2,500-2,600 a quintal. We can export only if prices drop to levels of ₹20-23 a kg. At one point in time, we had feared prices could zoom to ₹28-30 a kg, especially after the Ukraine war broke out,” MuBala’s Singh said.  

The prices are against the minimum support price of ₹1,870 a quintal for the current marketing year ending September. For the next marketing year, the MSP has been fixed at ₹1,962. 

“Buyers are waiting for the prices to drop. To put off buying, they are citing quality as a reason. Once prices decline, they might begin to purchase again,” said Singh. 

8-year-high exports

A New Delhi-based trade analyst said, currently domestic prices are higher in view of demand from the poultry sector too. “With rice prices surging, poultry farmers are now back to using maize. Prices have, thus, increased,” the analyst said. 

In view of this, shipments of other cereals, including maize, have declined 25 per cent to 4.48 lakh tonnes (lt) in April-May this fiscal from 5.97 lt a year ago. The value, however, is higher at ₹1,167 crore compared with ₹1,098 in the year-ago period. 

Other cereals export increased to 38.55 lt last fiscal from 30.26 lt in 2020-21. The shipments were an eight-year high after 2014-15, when 35.10 lt were exported.

Maize prices have increased despite a record 33.18 million tonnes production last crop year (July 2020-June 2021). The production of maize witnessed a record crop for the second consecutive year. 

Very few enquiries

Exporters say they have very few enquiries this year compared to last year, when Bangladesh imported 50 per cent of the maize that was shipped from India, followed by Vietnam. 

On the other hand, some exporters have been affected by disputes with buyers from Vietnam, Singapore, and Malaysia. Some exporters had to suffer losses, resulting in them taking all precautions. This has slowed down shipments, exporters said.

COMMENT NOW