Maize exports come to a standstill as domestic prices rise
India’s maize (corn) exports have come to a virtual halt as rising domestic prices have affected its competitiveness in the global market with Pakistan taking advantage of its currency depreciation.
“Indian prices are not competitive in the global market, particularly in Asia. Pakistan is dominating the Asian market, offering maize at least $30 a tonne lower,” said New Delhi-based export Rajesh Paharia Jain.
“Pakistan has been a strong competitor throughout this season as its currency has weakened drastically compared to India,” said Mukesh Singh, Director of Mumbai-based MuBala Agro Commodities Pvt Ltd.
Pak vs Indian rupee
Pakistan is offering maize at $240 a tonne cost and freight (C&F), while the Indian produce is quoted as high as $305 C&F, said M Madan Prakash, President, Agri Commodities Exporters Association (ACEA).
As of Monday, the Pakistan rupee was quoted at 287.03 to the dollar. In comparison, the Indian rupee is quoted at 83.19. Maize is delivered at the ports at around ₹22,000-23,000 a tonne, said Prakash. “Domestic prices have seen an upward movement since the (rabi) harvest. Stocks ex-Purnea in Bihar are currently quoted between ₹18,000 and ₹21,000 a tonne. Prices are getting support around ₹22,000,” Jain said
The weighted average price of maize in agricultural produce marketing committee (APMC) yards is currently ₹1,971 a quintal.
Ethanol demand
“Though Pakistan’s quotes are competitive, there are problems with its quality. However, buyers are willing to take a risk with its shipments,” said Prakash.
As a result, the export market is sluggish for Indian maize. On the other hand, the domestic crop is robust, Jain said. “Domestic demand for maize is good, particularly from ethanol and feed manufacturers,” he said.
MuBala’s Singh said only those who have not fulfilled their commitments are exporting maize. “Most of us have finished exporting this season,” he said.
Jain said the other problem with maize supplies is that it is now being distributed through the public distribution system in the place of wheat and rice.
Output lower?
On the other hand, a section of the trade feels maize production could be lower this year since the yield could be affected due to a truant monsoon.
“Bihar, North Karnataka and Maharashtra depend on rains for farming. Temperatures are high in these areas and rainfall has been deficient this year,” said a trade analyst.
The maize crop, in particular, has been affected by a 32 per cent deficient rainfall during August. This year, the south-west monsoon, a key factor for Indian agriculture, has been affected by the development of El Nino.
The sea temperature rises due to El Nino and Asia is usually affected by drought and prolonged dry periods. The water water phenomenon will likely last until February-March 2024.
However, India is likely to benefit from the Indian Ocean Dipole that developed in September and brought in excess rainfall across the country. It may last until December, bringing good rainfall in South India.
“We have got reports that the stalk growth in maize has been stunted in parts of Maharashtra, which points to a lower yield,” said ACEA’s Prakash.
As a result, maize prices could rule around ₹2,200-300 a quintal in APMC yards and ₹2,500-600 at the users end, the analyst said.