Low prices give maize traders an edge in global markets

MUMBAI: Maize export from India may cross 1.5 million tonne if prices stay as competitive as they are now. India has contracted 1-mt order, of which around 0.8 mt has already been shipped till last week.

Indian maize is currently priced at $30 to $40 per tonne, this is cheaper than the rates offered by the US and Argentina for exports to south-east Asia. It costs $270 to $275 per tonne including freight to export to these countries from India.

Last year���s maize exports was around 5 lakh tonne, but the number is much higher this year mainly due to lower freight and better production estimates. Production is expected to touch 16.78 mt in 2007-08, according to the government estimates released last month.

The managing director of a Madhya Pradesh-based company said that exports can surpass 2 mt by June. ���People have already started supplies for contracts to be shipped by May and June,��� the exporter said.

An official from a maize export firm, on condition of anonymity, said India has a potential to export about 0.4 mt more, but this will depend on the domestic demand and global price. ���If domestic demand from the poultry and starch industry grows, local prices may go up and India may not remain competitive,��� said the official.

The fear recession in the US and Argentinean crop, which is expected to be out in April, may subdue prices in future.Meanwhile, availability of railway wagons has affected the transfer of maize for shipment to the ports. Currently, around 25 to 30 rakes carrying 2,400 tonne maize each are lying in Karnataka to be sent to ports.

But maize exports from Andhra Pradesh to Kakinada is not an issue as maize-growing areas are near to the port and thus rail wagons are not required.

Maize price in spot market has weaken to Rs 720 per quintal in Nizamabad. Even on futures, the March contract closed down at Rs 769 per quintal while April contract was down at Rs 811 on Monday.