WASHINGTON, D.C., U.S. — India’s market year 2015-16 corn imports are estimated higher at 400,000 tonnes based on the recent government allocation under the tariff rate quota (TRQ) imports, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a Feb. 9 report.
Due to the reported crop in kharif corn in the major drought affected producing states, domestic corn prices have firmed up buoyed by strong domestic demand from the poultry and starch industry. Despite weak exports, market sources report steady demand from the Indian poultry industry (improved consumer demand for poultry products) and starch industry (strong demand from the local textile industry).
Market sources expect domestic prices to ease with the harvest of rabi corn in Bihar and eastern India from the end of March.
India is likely to import corn in market year 2015-16 on tight domestic supplies due to the drought affected domestic harvest. The 2015-16 import estimate is raised to 400,000 tonnes based on the quota allocation of 290,000 tonnes of corn for imports under the tariff rate quota (TRQ), and the likelihood of additional allocation of 100,000 t to 120,000 tonnes before the rabi corn arrivals begin in April. While the conditionality of non-GMO corn for imports may limit sourcing options, trade sources report that some countries can provide non-GMO certificates as per the government’s requirement.
Speculation on the size of the ‘poor monsoon’ affected domestic harvest. The local poultry and starch industries pressured the government to allow importing corn under the TRQ (500,000 tonnes at zero duty in an Indian fiscal year, April/March). On Jan. 4, the government parastatal (PEC) issued a tender for importing 320,000 tonnes of corn under specific conditions including certification from a government agency in the country of origin that the cargo is non-GMO.
On Jan. 13, PEC reviewed the bids for the tender and offered orders for imports of 290,000 tonnes corn under the TRQ at various specified ports in the price range of $191.99 to $196 port delivered for corn. Most of the qualifying bids offered corn sourced from East European and Black Sea origins which can provide non-GMO certification. Encouraged by the response from exporters, PEC is likely to offer another 100,000 to 120,000 tonnes of corn under TRQ for imports before end of March.
Assuming no major weather aberration from now through the harvest of the upcoming rabi corn, the government may not be inclined to allow further imports of corn under TRQ. Prospects for imports in the later part of the marketing year will depend on the size of rabi corn harvest, which is currently progressing well in the major growing areas. Assuming a normal harvest of rabi corn and relatively stable domestic prices during the balance of marketing year, market year 2015-16 imports are estimated to reach 400,000 tonnes.
Indian corn exports have declined sharply since March 2015 due to relatively low international prices on sufficient supplies from competing origins. Based on the latest official data, market year 2014-15 corn exports are estimated at 1.1 million tonnes compared to 3.9 million tonnes in market year 2013-14. Based on the current pace of exports, it is estimated that market year 2015-16 corn exports to decline to 700,000 tonnes.