The unrest in Myanmar and high shipping costs have resulted in countries in Southeast Asia and Bangladesh turning to India to meet their demand for corn (corn) for animal feed.
“Vietnam, Malaysia, Bangladesh and Sri Lanka are buying corn from India,” said Bimal Bengani, CEO of Bengani Food Products Pvt Ltd. based in Kolkata.
“Malaysia, Vietnam and Thailand are buying Indian corn to meet the needs of the chicken and poultry sectors. One of the reasons for the turn of these countries towards India is the riots in Myanmar caused by the takeover of the army of the administration there, ”said Delhi trade analyst S Chandrasekaran.
These orders have arrived in India over the last month and a half to two.
“We accept orders from countries like Malaysia and Vietnam because our prices are competitive,” Bimal Bengani said.
Currently, corn is offered for free at a price of $ 250 per tonne (JPY 18,600). On the other hand, cereals are offered in these countries at a price of 275–277 US dollars (20,450–20,600 ₹) cost and cargo (CNF).
At the Chicago Board of Trade, corn futures currently rule with $ 5.89 per bushel (17,250 ₹ per tonne). According to the International Grains Council, corn is currently exported at a price of 252 USD (.7 18,750 ₹) from Argentina, 260 ₹ (₹ 19,350 ₹) from Brazil and 266 (800 800 19,800) from the Gulf of America.
Corn prices have risen nearly 22 percent since the beginning of the year, while the IGC corn sub-index has risen 60 percent year-on-year.
“Indian corn exports are competitive because exporters here are content with a minimum margin of 1-2 percent,” Chandrasekharan said.
Madan Prakash, president of the Association of Exporters of Agricultural Products, said exporters are currently delivering corn delivered to Chennai from Andhra Pradesh in the amount of 17,000 per tonne by the end of the week.
At various terminals of the domestic agricultural market, corn reigns between 1,500-1,700 ₹ quintals, depending on quality. This is against the minimum support price of 1,850 ₹, set for this season until September.
“We also bring some corn from Karnataka. We also received cargo from Tamil Nada, but the crop yield has come to an end, “said Prakash, whose Rajathi group exports agricultural products.
High transportation costs
Another reason why Indian corn has found its way into Southeast Asian countries is the jump in commodity prices. Traders say China is currently collecting as many containers as possible for all destinations, including the European Union and the United States.
China wants these containers to either import all their needs or export their products. Beijing even pays $ 500 to transport an empty container to its ports from places like Colombo in Sri Lanka.
“The result of China’s cleanup of all containers has left India at an advantage to meet current demand in the Southeast Asian region,” trade analyst Chandrasekaran said.
“Malaysia and Vietnam used to buy corn from countries like Brazil, Argentina and Ukraine, in addition to Myanmar. The problem with the container forced them to turn to India, ”he said.
The problem with these countries is that corn transport rates from these countries are currently $ 55-65 (4,100-4,800 JPY) per tonne. The container fee is $ 500 (JPY 37,200).
“In contrast, customs tariffs from India amount to 20 tonnes (1,500 JPY) per tonne. The rates give these countries an arbitration of 30-35 USD (2,250-2,600 JPY), ”Chandasekaran said.
Prakash agreed with Chandrasekharan’s position on freight charges.
Current demand for corn from these destinations is temporary and could continue for another six months, he said.
Bimal Bengani said corn exports to the Southeast Asian region will continue given the competitive rates offered in India.
Chandrasekharan said that corn exports take place from the ports of Kolkata and Chennai on the east coast.
“Corn from Andhra Pradesh and the Ballari region and Raichur from Karnataka are shipped from Chennai. “From Kolkata, corn from Bihar is sent to Southeast Asia,” he said.
In addition, the current exchange rate of the rupee depreciating against the dollar would also affect corn exports from India.
The Indian rupee reached a nine-month low of 75.4 per dollar earlier this week. It has fallen by more than four percent in recent weeks. However, he managed to climb back above 75 to the dollar. On Friday, the rupee was quoted at 74.70 per dollar, which is 23 paises more than on Thursday.
Export and production
According to the Directorate for the Development of Exports of Agricultural and Processed Food Products, a subsidiary of the Ministry of Commerce, Indian corn exports have climbed to six-year highs last year’s fiscal level.
During the fiscal period April-January, 22.03 tons of lara (lt) of corn were exported, and Bangladesh amounted to 14.75 lt. Nepal was the second largest importer, buying 5.13 liters, while Vietnam bought 1.11 lakh tons. Malaysia imported almost 50,000 tons.
Maize exports from India fell from record deliveries of 47.88 lakh tonnes in 2012-13. They have since fallen before the last fiscal reversal.
Coarse grain exports fell below 10 lakh tons from 2014-15. In the year when 28.25 lakh tons were shipped.
According to the second preliminary estimate of the Ministry of Agriculture for the production of food cereals for this agricultural year until June, the production of corn will probably be a record 30.16 million tons (mt) compared to 28.77 mt last year.
The export scenario is in sharp contrast to 2019, when India had to import 3.18 liters last year, 10 times more than shipments to the country.
Imports of maize are permitted by the Union government under a tariff quota (TRQ) regime at a lower rate of 15 per cent. According to TRQ, five lt can be a year.
In addition, corn imports pay 50 percent of customs duties and an additional five percent of the integrated tax on goods and services and 10 percent of the social welfare allowance.