S-E Asia turns to India for maize on Myanmar unrest, surging freight rates

Unrest in Myanmar and superior delivery fees have resulted in South-East Asian international locations and Bangladesh turning to India to meet their maize (corn) need for feed purposes.

“Vietnam, Malaysia, Bangladesh and Sri Lanka are shopping for maize from India,” claimed Bimal Bengani, Managing Director of Kolkata-primarily based trading residence Bengani Food items Solutions Pvt Ltd.

“Malaysia, Vietnam and Thailand are shopping for Indian maize to meet the need of the rooster and poultry sectors. 1 rationale for these international locations to change in direction of India is the unrest in Myanmar arising out of the Military using over the administration there,” claimed Delhi-primarily based trade analyst S Chandrasekaran.

These orders have occur to India over the final just one-and-a-half to two months.

“We are finding orders from international locations such as Malaysia and Vietnam as our prices are aggressive,” claimed Bimal Bengani.

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Competitive prices

Presently, maize is remaining available at $250 a tonne (₹18,600) absolutely free-on-board (f.o.b). On the other hand, the cereal is available at $275-277 (₹20,450-20,600) charge and freight (CNF) to these international locations.

On the Chicago Board of Trade, corn futures are presently ruling at $5.89 a bushel (₹17,250 a tonne). According to the Worldwide Grains Council, maize is presently exported at $252 (₹18,750) a tonne from Argentina, $260 (₹19,350) from Brazil and $266 (₹19,800) from the US Gulf (all f.o.b).

Corn prices have attained approximately 22 for every cent considering the fact that the beginning of the yr, whilst the IGC maize sub-index has attained 60 for every cent yr-on-yr.

“Indian maize exports are aggressive considering the fact that exporters listed here settle for a reduced 1-two for every cent margin,” claimed Chandrasekharan.

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M Madan Prakash, President of Agri Commodities Exporters Association, claimed that exporters were being presently finding maize shipped in Chennai from Andhra Pradesh at ₹17,000 a tonne until eventually final 7 days-end.

At a variety of domestic agricultural industry terminals, maize is ruling between ₹1,five hundred-1,700 a quintal dependent on the quality. This is in opposition to the least guidance cost of ₹1,850 mounted for this year to September.

“We are also finding maize to some extent from Karnataka. We were being finding cargo from Tamil Nadu also but the crop arrivals have occur to an end,” claimed Prakash, whose Rajathi Group exports agri-solutions.

High freight charge

An additional rationale for Indian maize getting its way into the South-East Asian international locations is surging freight rates. Traders say that China is presently accumulating as a lot of containers as doable for all destinations, like the European Union and United States.

China needs these containers to either import all its requirements or export its solutions. Beijing is even having to pay $five hundred for ferrying an vacant container to its ports from places such as Colombo in Sri Lanka.

“The final result of China mopping up all the containers has left India with the gain of conference quick need in the South-East Asian region,” claimed trade analyst Chandrasekaran.

“Malaysia and Vietnam had been sourcing maize from international locations such as Brazil, Argentina and Ukraine moreover Myanmar earlier. The container issue has pressured them to change to India,” he claimed.

The issue for these international locations is that the freight rates for finding maize from these international locations is presently $55-sixty five (₹4,a hundred-4,800) a tonne. Expenses for a container are $five hundred (₹37,two hundred).

“In distinction, freight rates from India are $20 (₹1,five hundred) a tonne. The rates give these nations an arbitrage of $thirty-35 (₹2,250-two,600),” claimed Chandasekaran.

Prakash concurred with Chandrasekharan’s check out on the freight fees.

The current maize need from these destinations are short term and could continue on for a further 6 months, he claimed.

Bimal Bengani claimed maize exports to the South-East Asian region would continue on in check out of the aggressive rates available in India.

Chandrasekharan claimed maize exports were being using spot from the east coastline ports of Kolkata and Chennai.

“Maize from Andhra Pradesh and Karnataka’s Ballari and Raichur locations is remaining delivered from Chennai. From Kolkata, maize from Bihar is sent to South-East Asia,” he claimed.

Apart from, the current currency exchange price with the rupee depreciating in opposition to the dollar would also favour maize exports from India.

The Indian rupee strike a nine-thirty day period reduced of seventy five.4 to the dollar earlier this 7 days. It has dropped over four for every cent in the final few of months. Having said that, it has managed to climb back higher than seventy five to the dollar. On Friday, the rupee was quoted at 74.70 to the dollar, up 23 paise from Thursday.

Exports & Generation

According to data from the Agricultural and Processed Food items Solutions Export Progress Authority, an arm of the Commerce Ministry, India’s maize exports surged to a 6-yr superior final fiscal.

During April-January interval of the fiscal, 22.03 lakh tonnes (lt) of maize were being exported with Bangladesh accounting for 14.seventy five lt. Nepal was the second most important importer, shopping for 5.13 lt, whilst Vietnam acquired 1.11 lakh tonnes. Malaysia imported approximately fifty,000 tonnes.

Maize exports from India dropped considering the fact that file shipments of forty seven.88 lakh tonnes in 2012-13. Considering that then, they have been on a downswing prior to the turnaround final fiscal.

The coarse cereal’s exports slipped to underneath ten lakh tonnes considering the fact that 2014-fifteen, when 28.25 lakh tonnes were being delivered out.

According to the Agriculture Ministry’s second advance estimate of production of foodgrains for this crop yr to June, maize production is probable to be a file thirty.sixteen million tonnes (mt) in opposition to 28.77 mt final crop yr.

The export situation is in sharp distinction to 2019 when India had to import three.18 lt, ten moments the shipments into the place the past yr.

Maize imports are authorized by the Union authorities beneath the tariff price quota (TRQ) routine at a reduced Customs obligation of fifteen for every cent. Less than TRQ, five lt can be yearly.

Over and above this, maize imports appeal to fifty for every cent Customs obligation and an added five for every cent Built-in Products and Solutions Tax and ten for every cent social welfare surcharge.