Unrest in Myanmar and superior shipping and delivery rates have resulted in South-East Asian countries and Bangladesh turning to India to fulfill their maize (corn) demand for feed needs.
“Vietnam, Malaysia, Bangladesh and Sri Lanka are acquiring maize from India,” mentioned Bimal Bengani, Controlling Director of Kolkata-primarily based buying and selling household Bengani Meals Products Pvt Ltd.
“Malaysia, Vietnam and Thailand are acquiring Indian maize to fulfill the demand of the chicken and poultry sectors. 1 cause for these countries to turn to India is the unrest in Myanmar arising out of the Army getting above the administration there,” mentioned Delhi-primarily based trade analyst S Chandrasekaran.
These orders have arrive to India above the final just one-and-a-50 percent to two months.
“We are finding orders from countries this sort of as Malaysia and Vietnam as our rates are aggressive,” mentioned Bimal Bengani.
Cereals carry farm exports to $seventeen.5 billion in April-Feb
Competitive rates
Now, maize is becoming provided at $250 a tonne (₹18,600) totally free-on-board (f.o.b). On the other hand, the cereal is provided at $275-277 (₹20,450-twenty,600) value and freight (CNF) to these countries.
On the Chicago Board of Trade, corn futures are presently ruling at $5.89 a bushel (₹17,250 a tonne). In accordance to the Global Grains Council, maize is presently exported at $252 (₹18,750) a tonne from Argentina, $260 (₹19,350) from Brazil and $266 (₹19,800) from the US Gulf (all f.o.b).
Corn rates have received almost 22 per cent given that the beginning of the year, although the IGC maize sub-index has received sixty per cent year-on-year.
“Indian maize exports are aggressive given that exporters right here settle for a reduced one-two per cent margin,” mentioned Chandrasekharan.
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M Madan Prakash, President of Agri Commodities Exporters Affiliation, mentioned that exporters were being presently finding maize shipped in Chennai from Andhra Pradesh at ₹17,000 a tonne until finally final week-stop.
At many domestic agricultural market terminals, maize is ruling concerning ₹1,500-one,700 a quintal dependent on the top quality. This is towards the minimal support price of ₹1,850 set for this period to September.
“We are also finding maize to some extent from Karnataka. We were being finding cargo from Tamil Nadu also but the crop arrivals have arrive to an stop,” mentioned Prakash, whose Rajathi Group exports agri-merchandise.
High freight value
An additional cause for Indian maize locating its way into the South-East Asian countries is surging freight costs. Traders say that China is presently accumulating as several containers as possible for all locations, which includes the European Union and United States.
China would like these containers to either import all its specifications or export its merchandise. Beijing is even paying out $500 for ferrying an empty container to its ports from destinations this sort of as Colombo in Sri Lanka.
“The consequence of China mopping up all the containers has still left India with the gain of conference quick demand in the South-East Asian location,” mentioned trade analyst Chandrasekaran.
“Malaysia and Vietnam experienced been sourcing maize from countries this sort of as Brazil, Argentina and Ukraine other than Myanmar before. The container difficulty has forced them to turn to India,” he mentioned.
The difficulty for these countries is that the freight costs for finding maize from these countries is presently $55-65 (₹4,100-4,800) a tonne. Prices for a container are $500 (₹37,200).
“In distinction, freight costs from India are $twenty (₹1,500) a tonne. The costs give these nations an arbitrage of $thirty-35 (₹2,250-two,600),” mentioned Chandasekaran.
Prakash concurred with Chandrasekharan’s check out on the freight rates.
The recent maize demand from these locations are short term and could keep on for an additional 6 months, he mentioned.
Bimal Bengani mentioned maize exports to the South-East Asian location would keep on in check out of the aggressive costs provided in India.
Chandrasekharan mentioned maize exports were being getting position from the east coast ports of Kolkata and Chennai.
“Maize from Andhra Pradesh and Karnataka’s Ballari and Raichur areas is becoming transported from Chennai. From Kolkata, maize from Bihar is sent to South-East Asia,” he mentioned.
Apart from, the recent forex trade rate with the rupee depreciating towards the dollar would also favour maize exports from India.
The Indian rupee hit a nine-thirty day period reduced of seventy five.4 to the dollar before this week. It has dropped above 4 per cent in the final few of months. Having said that, it has managed to climb again earlier mentioned seventy five to the dollar. On Friday, the rupee was quoted at 74.70 to the dollar, up 23 paise from Thursday.
Exports & Manufacturing
In accordance to knowledge from the Agricultural and Processed Meals Products Export Enhancement Authority, an arm of the Commerce Ministry, India’s maize exports surged to a 6-year superior final fiscal.
For the duration of April-January period of the fiscal, 22.03 lakh tonnes (lt) of maize were being exported with Bangladesh accounting for 14.seventy five lt. Nepal was the second greatest importer, acquiring 5.thirteen lt, although Vietnam bought one.eleven lakh tonnes. Malaysia imported almost 50,000 tonnes.
Maize exports from India dropped given that document shipments of 47.88 lakh tonnes in 2012-thirteen. Because then, they have been on a downswing just before the turnaround final fiscal.
The coarse cereal’s exports slipped to down below ten lakh tonnes given that 2014-fifteen, when 28.twenty five lakh tonnes were being transported out.
In accordance to the Agriculture Ministry’s second progress estimate of output of foodgrains for this crop year to June, maize output is most likely to be a document thirty.16 million tonnes (mt) towards 28.77 mt final crop year.
The export scenario is in sharp distinction to 2019 when India experienced to import three.eighteen lt, ten times the shipments into the country the prior year.
Maize imports are permitted by the Union authorities underneath the tariff rate quota (TRQ) regime at a lower Customs obligation of fifteen per cent. Underneath TRQ, 5 lt can be every year.
Beyond this, maize imports catch the attention of 50 per cent Customs obligation and an supplemental 5 per cent Integrated Items and Services Tax and ten per cent social welfare surcharge.