June 10, 2021
India has increased its corn exports as a rally in global prices to their highest since 2013 has made shipments from India competitive, easing concerns about rising food inflation in Southeast Asia.
Indian exporters have signed deals to sell around 4, 00,000 tons of corn for shipment in June to July to animal feed producers in Vietnam, Malaysia, Sri Lanka, and Bangladesh.
Indian supplies are much cheaper for South Asian markets than shipments from Latin America or the United States because of lower prices and freight.
Traditionally, India has been a regular corn seller to Asian buyers, but rising domestic animal feed consumption curbed sales in recent years.
Cheaper corn supplies from India would keep the cost of animal feed lower for consumers of meat and chicken in Asia, who are among the most vulnerable to high food prices.
Benchmark Chicago corn futures have more than doubled since August on rising Chinese demand and declining production in key exporter Brazil. In early May, prices hit their highest since March 2013 at over $7 a bushel.
India has been dynamic with cargoes being shipped to Vietnam and Malaysia and Bangladesh and Sri Lanka have also been taking Indian corn. Now, there is interest from South Korea as well.”
Indian corn is being quoted at $295-$300 a tonne, including cost and freight (C&F), for sale to Southeast Asia as compared with $330 a tonne, C&F, for South American corn.
The health of the U.S. corn crop, the world’s biggest, is also being questioned amid hot and dry weather. Chicago corn futures have climbed more than 40% in 2021 as deteriorating U.S. crop conditions support prices.
But due to the recent rally in global prices, Indian corn has become competitive in the world market. Local demand from the poultry industry is also a bit subdued because of the coronavirus outbreak. That is helping us to export more.
India’s poultry sector is expected to consume 2 million tons less corn than normal because of the recent surge in coronavirus cases.
Indian exports are expected to reach around 2.6 million tons in 2021, the highest in seven years, traders and analysts estimated.
The country has exported around 9, 00,000 tonnes of corn in the first five months of 2021, compared with 1,36,454 tons during the same period a year ago. However, total Indian corn supplies are likely to be limited by competition from other crops.