Corn prices have fallen by 15 USD per tonne in the last month yet demand for Indian corn (maize) in the global market continues to be sagging. The corn prices ruling below the minimum support price (MSP) of USD 24 per quintal. It was ruling at 22.7 USD per quintal in the year 2021-2022.
“The international market has softened with Argentina and South American prices declining. This has slowed down Indian shipments on price and quality,” said Rajesh Paharia Jain, a New Delhi-based exporter.
“There is some demand from South-East Asia. Otherwise, enquiries are few and far in between,” said M Madan Prakash, President of Agro Commodities Exporters Association (ACEA).
Corn may gain acceleration soon
“Though export demand is slack for Indian corn now, it is likely to pick up soon as the probability of El Nino could result in countries seeking the rough grain,” said a Delhi-based analyst.
“Since prices are below MSP, many big stockists are accumulating stocks. Even processors and starch makers are stocking up since prices have come below USD 24” said Mukesh Singh, Director of Mumbai-based MuBala Agro Commodities Pvt Ltd.
Currently, the weighted average price of corn is USD 21 across various agricultural produce marketing committee (APMC) yards in the country. During the same period a year ago, prices ruled at USD 26 per quintal.
Crop output is record breaking
This year the quality of corn is good and also the production has increased. Rough grain’s production this crop year to June has been estimated by the Agriculture Ministry at a record 34.61 Million Tonnes (MT). Last year, the production was 33.73 MT. “The crop size this year has been fairly good and we expect the output to be approximately 33-34 MT with better quality,” Jain said.
Last year, the corn prices were ruling higher because of the Ukraine war which disturbed supplies from the top exporting nation. “Prices for exporters have dropped to USD 230 per tonne from USD 265 per tonne. Current Indian prices are $280-285 a tonne cost and freight in containers,” Jain said.
Prakash said corn was being offered at $260 free-on-board currently.
US expectations regarding Indian corn
According to the US Department of Agriculture, India’s corn exports are estimated to be around 3.5 MT in fiscal 2022-2023. The corn exports this year are expected to decline to 3.6 MT from 4 MT last year.
They said that the crop in the coming year could be smaller as low prices could weaken incentives to plant corn. They forecast good growth in demand for domestic feed use and it will tighten exportable supplies. “Bulk of the corn for exports is coming from Maharashtra. Parity is no problem in bulk. Vietnam is seeking our corn,” Singh said.
International concerns
As per the International Grains Council, corn prices have declined 17-24% year-on-year. Currently, corn prices on Chicago Board of Trade (CBOT) for July delivery are quoted at $5.88 USD a bushel ($231.62/tonne). Major markets are Vietnam and Bangladesh for Indian corn. “Ukraine shipments could be under pressure,” the analyst said. Jain said almost all ports in the country are holding around 0.75 Million Tonnes of corn harvested in the rabi season. But for the duty benefit Indian corn is being enjoyed in Vietnam, there are no other benefits.