INDIA- According to a report by Reuters, India’s corn export landscape is facing a significant downturn, with recent reports indicating a sharp decline in exports due to surging domestic prices fueled by robust demand from the country’s poultry and ethanol sectors.
Traditional importers, including Vietnam, Nepal, and Malaysia, are reportedly turning to South American countries offering corn at a more competitive price, exacerbating the challenges faced by Indian exporters.
According to sources cited by Reuters, the cost of Indian corn has reached approximately US$300 per tonne, a notable contrast to the US$230 per tonne price tag in South American countries. This substantial price difference has prompted the redirection of purchases by key importing nations.
Typically, India exports between 250,000 to 300,000 tonnes of corn per month. However, in December, exports plummeted to a mere 30,000 tonnes, reflecting the significant impact of soaring domestic prices on international trade dynamics.
Contributing to the price surge is a potential discrepancy in the government’s estimates of corn production. While official estimates place last summer’s corn production at 22.5 million tonnes, traders suggest that the actual output might be considerably lower.
Concerns about a potentially lower winter crop further contribute to the uncertainty surrounding India’s corn supply.
In a move that added to the challenges faced by the industry, the government recently increased the procurement price of ethanol made from corn by 8.8%.
This decision has led India’s poultry industry, the largest consumer of corn, to request duty-free imports of corn to mitigate the impact of rising prices. As of now, the government has not granted this request, adding to the complexity of the situation.
The shift in global corn markets highlights the importance of price competitiveness in international trade, forcing Indian exporters to navigate these challenges to maintain their foothold in the global corn market.
As the situation unfolds, industry stakeholders are closely monitoring developments, hoping for a resolution that balances the interests of both domestic consumers and international trade partners.
In related news, India does not plan to import wheat, owing to its farmers’ likelihood to harvest a bumper crop that will boost stockpiles in the world’s second-biggest producer of the staple, the trade minister said recently.
India banned wheat exports in 2022 after output was curtailed due to a heat wave, but more recently overseas sales picked up as Russia’s invasion of Ukraine sent global prices to multi-year highs.
The government has sold around 6 million metric tons of wheat to local bulk buyers since June. 1, when the state-run Food Corporation of India started selling the grain from its warehouses.
Despite selling wheat from its granaries, inventories at state warehouses are likely to remain above the target of 7.46 million metric tons fixed for April 1, when a new marketing year starts, a top government official said earlier this month.
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