Unrest in Myanmar and substantial shipping fees have resulted in South-East Asian nations and Bangladesh turning to India to meet up with their maize (corn) need for feed applications.
“Vietnam, Malaysia, Bangladesh and Sri Lanka are getting maize from India,” claimed Bimal Bengani, Running Director of Kolkata-primarily based investing property Bengani Foods Products Pvt Ltd.
“Malaysia, Vietnam and Thailand are getting Indian maize to meet up with the need of the rooster and poultry sectors. A single cause for these nations to transform in the direction of India is the unrest in Myanmar arising out of the Military getting more than the administration there,” claimed Delhi-primarily based trade analyst S Chandrasekaran.
These orders have come to India more than the last 1-and-a-half to two months.
“We are receiving orders from nations this kind of as Malaysia and Vietnam as our prices are aggressive,” claimed Bimal Bengani.
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Competitive prices
Now, maize is remaining supplied at $250 a tonne (₹18,600) free-on-board (f.o.b). On the other hand, the cereal is supplied at $275-277 (₹20,450-twenty,600) cost and freight (CNF) to these nations.
On the Chicago Board of Trade, corn futures are at present ruling at $5.89 a bushel (₹17,250 a tonne). According to the Intercontinental Grains Council, maize is at present 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 prices have received virtually 22 per cent considering the fact that the beginning of the calendar year, although the IGC maize sub-index has received sixty per cent calendar year-on-calendar year.
“Indian maize exports are aggressive considering the fact that exporters in this article settle for a reduced one-2 per cent margin,” claimed Chandrasekharan.
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M Madan Prakash, President of Agri Commodities Exporters Affiliation, claimed that exporters were at present receiving maize sent in Chennai from Andhra Pradesh at ₹17,000 a tonne until last week-close.
At many domestic agricultural marketplace terminals, maize is ruling between ₹1,500-one,seven hundred a quintal based on the top quality. This is against the minimal assist price tag of ₹1,850 mounted for this year to September.
“We are also receiving maize to some extent from Karnataka. We were receiving cargo from Tamil Nadu also but the crop arrivals have come to an close,” claimed Prakash, whose Rajathi Team exports agri-merchandise.
High freight cost
A different cause for Indian maize finding its way into the South-East Asian nations is surging freight charges. Traders say that China is at present collecting as many containers as probable for all locations, like the European Union and United States.
China wishes these containers to both import all its needs or export its merchandise. Beijing is even spending $500 for ferrying an empty container to its ports from destinations this kind of as Colombo in Sri Lanka.
“The result of China mopping up all the containers has left India with the edge of conference immediate need in the South-East Asian area,” claimed trade analyst Chandrasekaran.
“Malaysia and Vietnam had been sourcing maize from nations this kind of as Brazil, Argentina and Ukraine aside from Myanmar before. The container problem has compelled them to transform to India,” he claimed.
The problem for these nations is that the freight charges for receiving maize from these nations is at present $fifty five-sixty five (₹4,one hundred-4,800) a tonne. Prices for a container are $500 (₹37,two hundred).
“In distinction, freight charges from India are $twenty (₹1,500) a tonne. The charges give these nations an arbitrage of $30-35 (₹2,250-2,600),” claimed Chandasekaran.
Prakash concurred with Chandrasekharan’s look at on the freight fees.
The recent maize need from these locations are short-term and could go on for a further six months, he claimed.
Bimal Bengani claimed maize exports to the South-East Asian area would go on in look at of the aggressive charges supplied in India.
Chandrasekharan claimed maize exports were getting location from the east coastline ports of Kolkata and Chennai.
“Maize from Andhra Pradesh and Karnataka’s Ballari and Raichur regions is remaining shipped from Chennai. From Kolkata, maize from Bihar is despatched to South-East Asia,” he claimed.
Besides, the recent currency trade charge with the rupee depreciating against the greenback would also favour maize exports from India.
The Indian rupee strike a nine-month reduced of 75.4 to the greenback before this week. It has dropped more than 4 per cent in the last pair of months. Nevertheless, it has managed to climb back higher than 75 to the greenback. On Friday, the rupee was quoted at seventy four.70 to the greenback, up 23 paise from Thursday.
Exports & Creation
According to details from the Agricultural and Processed Foods Products Export Improvement Authority, an arm of the Commerce Ministry, India’s maize exports surged to a six-calendar year substantial last fiscal.
Through April-January interval of the fiscal, 22.03 lakh tonnes (lt) of maize were exported with Bangladesh accounting for fourteen.75 lt. Nepal was the second most important importer, getting 5.thirteen lt, although Vietnam purchased one.11 lakh tonnes. Malaysia imported virtually fifty,000 tonnes.
Maize exports from India dropped considering the fact that record shipments of 47.88 lakh tonnes in 2012-thirteen. Given that then, they have been on a downswing in advance of the turnaround last fiscal.
The coarse cereal’s exports slipped to down below ten lakh tonnes considering the fact that 2014-15, when 28.25 lakh tonnes were shipped out.
According to the Agriculture Ministry’s second progress estimate of production of foodgrains for this crop calendar year to June, maize production is very likely to be a record 30.16 million tonnes (mt) against 28.seventy seven mt last crop calendar year.
The export state of affairs is in sharp distinction to 2019 when India had to import 3.eighteen lt, ten periods the shipments into the place the former calendar year.
Maize imports are permitted by the Union authorities beneath the tariff charge quota (TRQ) regime at a reduced Customs responsibility of 15 per cent. Underneath TRQ, five lt can be every year.
Further than this, maize imports draw in fifty per cent Customs responsibility and an added five per cent Integrated Products and Products and services Tax and ten per cent social welfare surcharge.