High prices reducing India’s corn exports

Corn exports from India have plummeted recently as domestic prices have surged due to strong demand from the country’s poultry and ethanol industries, Reuters reported, citing several exporters.

The sources told Reuters that traditional importers of Indian corn, such as Vietnam, Nepal and Malaysia, have shifted their purchases to South American countries that are offering it at a lower price. They said Indian corn costs about $300 per tonne, compared to $230 per tonne in South American countries.

India, which typically exports between 250,000 to 300,000 tonnes of corn per month, only exported 30,000 tonnes in December, the exporters told Reuters.

Domestic corn production also has played a factor in the increase in prices. India’s government estimates that last summer’s corn production was 22.5 million tonnes, but traders told Reuters that the actual output was much lower and that the winter crop also could be lower than predicted.

Earlier this month, the government hiked the procurement price of ethanol made from corn by 8.8%. This move has prompted India’s largest user of corn, the poultry industry, to ask the government to allow duty-free imports corn, a request that has yet to be granted.

Tags: corn, export, prices, India