International Agriculture News

India may need over 1.5 mil mt corn imports to offset domestic deficit: sources

India, usually an exporter of corn, is likely to import the coarse grain this year due to a shortage in domestic production, and the imports could be between 1.5-2 million mt, according to market sources.

The imports are likely to come from Ukraine and countries in southern Africa since India only imports non-genetically modified corn and that limits options, a senior official with the country’s leading poultry association said.

Poultry, livestock, and starch companies together consume nearly 75-80% of country’s corn production.

“The poultry industry alone requires around 1 million mt of corn imports to meet last year levels,” the official said.

India has already signed deals to import 100,000 mt of corn from Ukraine, market sources said, but this could not be officially confirmed.

The Indian government currently imposes a 60% import duty on corn, but the imports are likely to be made under a tariff rate quota, sources said. A TRQ is when a country allows imports of certain quantity of a particular good at a reduced tariff rate.

In February, the country’s state-run international trade agency, Metals and Minerals Trading Corporation of India, had issued a circular asking consumers such as starch companies and feed buyers to quote their corn requirements.

The government hasn’t officially permitted duty-free imports yet.

Production of corn in India, the seventh-largest producer of the coarse grain, was hit by poor rains and pest infestation, Subhranil Dey, New Delhi-based grain analyst working at SMC Comtrade, said.

He expects the summer corn output for the crop year 2018-19 (July-June) to be at around 16 million mt, substantially lower than 20.4 million mt harvested in the same period last year. India harvests corn in two seasons — summer and winter. Harvest of summer corn starts in September and the winter corn is harvested from March.

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Prices of corn in India have risen nearly 70% over the last one year. In Devangere, a key market of the coarse grain in Karnataka, corn prices were quoted at maximum of Rupee 20,400/mt ($291.1/mt) on Wednesday, which is nearly 76% higher than a maximum price of Rupee 11,600/mt during the same period last year, according to data from government’s website Agmarknet.com.

spglobal.com

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