India’s market year 2015-16 rice ending stocks are estimated to be 18.5 million tonnes (16.2 million government rice and 2.3 million tonnes private) on higher government rice stocks due to higher procurement and relatively weak offtake, according to the FAS. Market year 2016-17 ending stocks are also forecast higher at 16.4 million tonnes on normal procurement and government offtake.
Indian government-held rice stocks as of July 1are estimated at 24.7 million tonnes, about 3 million tonnes higher than last year’s level, the report said. Government rice stocks for October are projected at 16.2 million tonnes on expected normal procurement and relatively stronger monthly offtake (3 million tonnes per month) due to tight government wheat stocks in the last quarter (July-September). Relatively weak export demand at the onset of the marketing year discouraged private trade from purchasing rice to cover future demand, the report said. Consequently, market year 2015-16 ending stocks with private trade is estimated lower at 2.3 million tonnes compared to 3.6 million tonnes in the same period of last year.
Indian rice exports have steadied since the beginning of calendar year 2016 on recovery in export demand for Basmati rice and non-Basmati rice. According to the provisional official statistics, rice exports for the first five months of calendar year 2016 were 4.4 million tonnes, down 15% compared to the same time last year. There has been recovery in export demand for Basmati rice largely due to competitive prices and revival of demand for non-Basmati rice in African countries, the report noted. Assuming no significant changes in the export demand and price parity for Indian rice, market year 2015-16 exports will reach the estimated 9.2 million tonnes at the current rate of exports, the report said.
Assuming normal weather conditions India’s corn production for market year 2016-17 is forecast at 23 million tonnes, the FAS said. With the arrival of India’s market year 2015-16 winter corn tapering off, domestic corn prices during June and July firmed up significantly on relatively strong domestic demand, the report said.
Prices are expected to remain firm in August/September on tight supplies, but favorable market year 2016-17 planting and production prospects and expected weak international prices are likely to contain significant price movements in the future, the report said.
With heightened concerns on the rising corn prices raised by local corn users (poultry and starch industries), the Indian government is exploring the option of importing relatively cheaper corn from the international market under the tariff rate quota (TRQ) of 500,000 tonnes at zero duty in the Indian fiscal year 2016-17, the FAS noted in the report
Meanwhile, on July 14 and 15 two tenders for importing 120,000 tonnes of non-bioengineered corn under specific conditions in different ports was cancelled due to lack of response from the exporters. India’s State of Trading Corp. and Metals and Minerals Trading Corporation of India also have issued tenders, but market sources said these tenders may not get adequate response due to lack of supplies of corn that may be certified non-bioengineered from the exporting country. Consequently, the report continues to estimate market year 2015-16 corn imports unchanged at 250,000 tonnes.
Since the TRQ is applicable through March 2017, PEC Limited has issued a tender for 200,000 tonnes of non-bioengineered corn for imports during mid-December through end-January, the period after the kharif crops (rice, corn and other coarse grains) and before the winter corn marketing season. Market sources said the tender may receive more interest as the futures price quotes for the period are competitive. The report continues to forecast market year 2016-17 corn imports at 200,000 tonnes due to the spillover of the Indian fiscal year 2016-17 TRQ imports.