Slack demand for corn exports continues despite fall in domestic prices
Traders and exporters say demand for Indian maize (maize) in the global market is still slowing down despite prices falling by $15 per tonne over the past month. Since April 1st, prices of corn destined for exports have fallen by about 15 percent.
The slump in demand comes on the heels of corn prices controlling less than Minimum Support Price (MSP) From ₹ 1,962 quintals. “The international market has slumped with lower prices in Argentina and South America. This has slowed down Indian shipments in terms of price and quality,” said Rajesh Paharia Jain, an exporter in New Delhi.
There is some demand from Southeast Asia. “Other than that, inquiries are few and far between,” said M Madan Prakash, President, Agricultural Commodity Exporters Association (ACEA).
You may pick up soon
“Although Indian maize export demand is slowing down now, it is likely to pick up soon as the possibility of El Nino could lead countries to look for coarse grains,” said a Delhi-based analyst.
“Since prices are lower than MSP, many big players are hoarding shares. Mukesh Singh, Director, MuBala Agro Commodities Pvt Ltd. said.
Currently, weighted average price of maize is INR 1,715 across various Agricultural Products Marketing Committee (APMC) yards in the country. During the same period last year, the price has stabilized at $2,123.
standard output
One of the main reasons for ruling corn prices lower than the MSP is that coarse grain production for this crop through June was estimated by the Ministry of Agriculture at 34.61 million tons (metric tons). Last year, production reached 33.73 metric tons. “The harvest volume this year was fairly good and we expect the production to reach 33-34 million tons with better quality,” Jin said.
Another reason corn prices soared last year was the Ukraine war, which disrupted supplies from the largest exporter. “Exporters’ rates have come down to Rs 19,000 per tonne from INR 22,000. Current Indian prices are around $280-$285 per tonne and container shipping cost,” Jain said.
Prakash said corn is on offer at $260 for free on the ship right now.
Exports may decline
According to the US Department of Agriculture, India’s corn exports this year are likely to drop to 3.6 million tons from 4 million tons a year ago. For the 2022-23 fiscal year, corn exports are estimated at around 3.5 metric tons.
She said next year’s harvest could be smaller because lower prices could dampen incentives to plant corn. It expects good growth in demand for domestic feed utilization and will reduce exportable supplies. The bulk of maize for export comes from Maharashtra. In the aggregate, parity is not an issue. “Vietnam is after our corn,” Singh said.
“The main markets are Vietnam and Bangladesh for Indian maize,” Jin said.
US corn has weather problems and stocks in Argentina are lower. “Ukraine’s shipments may come under pressure,” the analyst said. “One of the problems is that some buyers seem to have inventory,” Prakash said.
Almost all ports in the country are holding about 7.5 tons of maize harvested in the spring season, Jain said. But for the tariffs that Indian corn enjoys in Vietnam, there are no other benefits.
According to the International Grains Council, maize prices are down 17-24 percent year-on-year. Currently, Chicago Board of Trade (CBOT) corn prices for July delivery are set at 5.88 US cents a bushel ($231.62 per ton).