India’s corn sector is booming, harvest could grow to 39 mln tons

Unlike wheat, the corn sector in India is booming, said Rahul Chauhan of Grain India at the Trend & Hedge Club on September 25.

Corn production has grown significantly, rising from 31.65 million tons in MY 2020/21 to 37.5 million tons projected for MY 2024/25, according to USDA.

Rahul Chauhan expects the production to increase to 39 mln tonnes in the current MY, as corn is now the highest margin crop for farmers in India.

“They are getting very good prices, so they have an incentive to increase production,” he said.

Corn prices are now above the Minimum Support Price (MSP) of Rs. 2,225/t and range from Rs. 2,300-2,400/t, while 10 years ago the price was only Rs. 900/t. This price increase has stimulated farmers’ interest in corn production. The boom is largely due to the growing demand for ethanol production, and the crop is selling like hotcakes on local markets.

The total domestic consumption of corn in India, according to the USDA forecasts, will reach 38.4 mln tonnes in 2024/25 MY, or even 40 mln tonnes according to Rahul Chauhan’s estimates, which is significantly higher than 27.85 mln tonnes in MY 2020/21.

“However, the corn market may face new challenges as the government eases regulations on ethanol production from sugar during the peak sugar cane processing period (November-December), which could potentially increase pressure on corn prices during this period,” the report said.

As for corn imports to India, they are growing due to high prices and local demand. However, India imports only non-GMO corn with a 50% import duty. However, since this crop is an important part of the feed industry, the government has allowed the import of 0.5 million tons of corn with a 15% duty rate under the TRQ quota.

Tags: corn, India, crop forecast