India Mulls GM Corn Imports to Address Supply Deficit
Lower Duties Considered to Manage Rising Consumption
The Indian government is considering allowing the import of genetically modified (GM) corn at a lower import duty to bridge the supply deficit caused by rising consumption, according to two sources familiar with the matter. “There are a few issues to sort out, including how to handle the import of a genetically-engineered crop. There are cases against GMO imports in some courts. In addition, the cost analysis has to be worked out,” said one source. “Consultations are ongoing at a higher level, and some authorities have been asked to look into the issue, particularly the import of GM crops. Serious consideration is being given to ensure all safeguards are in place,” said another source.
Poultry Sector Supports GM Corn Imports
Industry Argues for Imports to Meet Ethanol Production Demand
A section of the poultry industry strongly supports the import of GM corn, arguing that the shipments should be considered at least to meet the demand for ethanol production. Moreover, the sector dismisses concerns over GM corn imports. Pointing out that India already permits the import of chicken from the US, where birds are fed GM maize and soybeans. In 2021-22, the government relaxed its rules to allow the import of 1.2 million tonnes of GM soymeal to support the domestic poultry industry after a record spike in feed prices. Furthermore, the surging demand for maize has pushed up prices to $0,28 per kg at the user level currently. Consequently, the government is particularly concerned about this and is looking at this option to ensure adequate supplies and control prices. Currently, corn is in high demand from the poultry, ethanol manufacturing, and starch industries.
Corn Production and Pricing Trends
Balancing Domestic Supply with International Imports
During the current crop year ending June 30, corn production is estimated at 22.72 million tonnes during the kharif season and 9.75 million tonnes in the rabi season. Last crop year, production was estimated at 23.67 million tonnes during the kharif season 11.69 million tonnes in the rabi season, and 2.7 million tonnes in the zaid or summer crop season, totaling a record 38.09 million tonnes. However, this year’s summer crop estimate has not been released yet. In 2023-24, the ethanol sector used 0.8 million tonnes of corn. Its expected to increase to 3.4 million tonnes this fiscal year and rise to 10 million tonnes by 2027-28. Additionally, the poultry sector utilized 16 million tonnes of corn last fiscal year. And is likely to consume an additional 1 million tonnes this fiscal year. Therefore, the feed sector has been lobbying hard to permit the import of GM corn. Which is available globally at a relatively cheaper cost.
Global and Domestic Corn Price Comparison
Evaluating the Benefits of Importing GM Corn
Currently, the weighted average price of maize across agricultural produce marketing committee (APMC) yards in the country is $0,25 per kg. However, in some APMCs in Madhya Pradesh and Karnataka, prices are higher at around $0,32. During the same time last year, prices were $0,21. On the Chicago Board of Trade, corn July contracts are quoting at $4,51 a bushel ($177,59 per tonne). Presently, the government imposes a 60 percent customs duty on corn imports. Also 5 percent IGST, and a 10 percent social welfare surcharge. Tariff rate quota (TRQ) imports are allowed at a 15 percent concessional duty. In 2020, the government allowed imports of 5 lakh tonnes of corn under TRQ.
Potential Benefits of GM Corn Imports
Supporting Multiple Industries and Ensuring Supply Stability
Allowing corn imports at zero duty would benefit farmers, especially those who grow sugarcane, and user industries, including sugarcane firms and exporters. Consequently, importing corn would enable sugarcane to be used more for sugar production. Which can be exported, unlike in 2023 and 2024 when the government curbed exports. This would ensure raw materials are readily available for industries and prevent issues faced by sugar companies due to government restrictions. Moreover, the Centre has introduced a scheme guaranteeing minimum support price (MSP) for corn growers supplying ethanol manufacturing firms. Therefore, imports would aid the poultry and starch sectors facing supply issues and rising input costs. Since 2023, the poultry sector has urged the government to allow GM corn imports and introduce high-yielding GM corn to increase productivity. Furthermore, feed prices account for about 65 percent of meat production costs, making this a crucial issue for the industry.
The Indian government is considering GM corn imports to address supply deficits and rising prices. This potential policy shift aims to support the poultry, ethanol, and starch industries while balancing domestic supply with international imports. Allowing GM corn imports could provide significant benefits to multiple sectors, ensuring stable supplies and controlling costs.