Demand for Indian corn (maize) in the global market continues to be slack despite prices dropping by $15 a tonne over the past month, traders and exporters say. Since April 1, prices of corn for exports have declined nearly 15 per cent. 

The slack demand comes on heels of corn prices ruling below the minimum support price (MSP) of ₹1,962 a quintal. “The international market has softened with Argentina and South American prices declining. This has slowed down Indian shipments on price and quality,” said Rajesh Paharia Jain, a New Delhi-based exporter.

“There is some demand from South-East Asia. Otherwise, enquiries are few and far in between,” said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA). 

May pick up shortly

“Though export demand is slack for Indian corn now, it will likely pick up soon as the likelihood of El Nino could result in countries seeking the coarse grain,” said a Delhi-based analyst.

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“Since prices are below MSP, many big players are accumulating stocks. Even processors and starch makers are stocking up since prices have dropped to levels of ₹1,800,” said Mukesh Singh, Director of Mumbai-based MuBala Agro Commodities Pvt Ltd. 

Currently, the weighted average price of corn is ₹1,715 across various agricultural produce marketing committee (APMC) yards in the country. During the same period a year ago, prices ruled at ₹2,123. 

Record output

A major reason for corn prices to rule below MSP is that the coarse grain’s production this crop year to June has been estimated by the Agriculture Ministry at a record 34.61 million tonnes (mt). Last year, the production was 33.73 mt. “The crop size this year has been fairly good and we expect the output at 33-34 mt with better quality,” Jain said.

Another reason for corn prices to rule higher last year was the Ukraine war which disrupted supplies from the top exporting nation. “Prices for exporters have dropped to ₹19,000 a tonne from ₹22,000. Current Indian prices are $280-285 a tonne cost and freight in containers,” Jain said. 

Prakash said corn was being offered at $260 free-on-board currently. 

Exports may dip

According to the US Department of Agriculture, India’s corn exports this year will likely decline to 3.6 mt from 4 mt a year ago. For the 2022-23 fiscal, corn exports are estimated to be around 3.5 mt. 

It said the crop in the coming year could be smaller as low prices could weaken incentives to plant corn. It forecast good growth in demand for domestic feed use and it will tighten exportable supplies. “Bulk of the corn for exports are coming from Maharashtra. Parity is no problem in bulk. Vietnam is seeking our corn,” Singh said. 

“Major markets are Vietnam and Bangladesh for Indian corn,” Jain said.

US corn is facing weather problems and stocks in Argentina are lower. “Ukraine shipments could be under pressure,” the analyst said. “One problem is that some of the buyers seem to have stocks,” said Prakash.

Jain said almost all ports in the country are holding around 7.5 lakh tonnes of corn harvested in the rabi season. But for the duty benefit Indian corn enjoys in Vietnam, there are no other benefits. 

According to the International Grains Council, corn prices have declined 17-24 per cent year-on-year. Currently, corn prices on Chicago Board of Trade (CBOT) for July delivery are quoted at $5.88 US cents a bushel ($231.62/tonne). 

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