Mumbai: India’s corn exports could jump more than four-fold to over three million tonnes in the year to 30 Sept., 2011 from the previous period’s low levels, a US trade official here said, spurred by high global prices and with quality issues resolved.
India has already exported over 2.5 million tonnes and has record production this crop year of 20.2 million tonnes, Amit Sachdev, India representative of the US Grains Council, told Reuters in an interview on Thursday.
“We are still in the marketing year. (India) can easily make it to more than three million tonnes, as we have already done more than 2.5 million tonnes till now,” Sachdev said.
The US Grains Council is a private, non-profit organization based in Washington DC and works to build export markets for US barley, corn and sorghum.
India, Asia’s second-largest grower of corn after China, generally sells around two to three million tonnes of corn a year in global trade of about 90 million tonnes.
But last season its exports dropped to 700,000 tonnes because of drought and crop damage from unseasonal rains.
Earlier this season, Vietnam rejected two shipments of Indian corn because of an infestation of beetles but since then the country has taken deliveries.
India’s corn output last year was 16.72 million tonnes, according to farm ministry data.
US corn futures in Chicago hit a record high on June 10 of $7.99-3/4 per bushel after a bullish June supply and demand report from the USDA.
The USDA report pegged corn supplies below earlier estimates and trimmed US corn acreage this year to 90.7 million from the previous outlook for 92.2 million. It also cut corn production prospects to 13.2 billion bushels from the previous forecast for 13.5 billion.
“The present rally in corn prices globally has benefited Indian exporters. Indian domestic prices have always been lower than international prices and for stock coming from the United States to the southeast Asian market, there is a big freight component,” Sachdev said.
Shipping costs from India to Asian buyers like Indonesia and Malaysia are typically around $30 per tonne whereas from the United States, the cost can be double.
Indian traders are quoting around $280-290 per tonne ($7.11-7.32 per bushel) for corn free on board (FOB) currently, down slightly from $304-305 per tonne ($7.72-7.74 per bushel) in January and February.
Among Asian buyers, Indonesian feed millers are snapping up cargoes from India and have struck the biggest deals in at least two years as Jakarta rushes to secure food supplies amid shrinking global grain stocks and rising food costs.
Next crop year, India’s corn acreage may nudge lower as farmers may prefer cotton if it gives better returns.
India raised the minimum price it guarantees to corn farmers by 11.3% to Rs 980 per 100 kilogrammes and this could support planting sentiment, Sachdev said.
Cotton support prices were raised by Rs 300 but are still below market prices of Rs 4,000 to Rs 5,000 per 100 kilogramme.
But any disruption to monsoon rains over growing areas may force farmers to stick with the crop, traders and analysts said.
“Farmers can switch to (corn) much later (than other crops) and then we will come to know whether the increase in support price will attract farmers to sow more corn,” Sachdev said.
Corn can be grown in 70-80 days where other crops take up to 120 days to mature and it can survive water scarcity better than other crops. The grain is cultivated in both summer and winter, although 85% of the acreage comes from the summer crop.
India’s rainy season so far appears to be progressing as expected with monsoon rains 16 percent above normal in the week to 8 June.