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

Unrest in Myanmar and high delivery fees have resulted in South-East Asian nations and Bangladesh turning to India to fulfill their maize (corn) need for feed purposes.

“Vietnam, Malaysia, Bangladesh and Sri Lanka are obtaining maize from India,” claimed Bimal Bengani, Controlling Director of Kolkata-centered investing home Bengani Food items Goods Pvt Ltd.

“Malaysia, Vietnam and Thailand are obtaining Indian maize to fulfill the need of the hen and poultry sectors. A single purpose for these nations to turn toward India is the unrest in Myanmar arising out of the Army using in excess of the administration there,” claimed Delhi-centered trade analyst S Chandrasekaran.

These orders have appear to India in excess of the very last 1-and-a-50 percent to two months.

“We are obtaining orders from nations these kinds of as Malaysia and Vietnam as our selling prices are competitive,” claimed Bimal Bengani.

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Competitive selling prices

At this time, maize is being offered at $250 a tonne (₹18,600) cost-free-on-board (f.o.b). On the other hand, the cereal is offered at $275-277 (₹20,450-twenty,600) price and freight (CNF) to these nations.

On the Chicago Board of Trade, corn futures are at this time ruling at $5.89 a bushel (₹17,250 a tonne). According to the International Grains Council, maize is at this time 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 selling prices have attained virtually 22 for every cent since the beginning of the year, even though the IGC maize sub-index has attained sixty for every cent year-on-year.

“Indian maize exports are competitive since exporters here settle for a small one-two for every cent margin,” claimed Chandrasekharan.

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M Madan Prakash, President of Agri Commodities Exporters Affiliation, claimed that exporters were at this time obtaining maize delivered in Chennai from Andhra Pradesh at ₹17,000 a tonne right until very last week-close.

At different domestic agricultural marketplace terminals, maize is ruling concerning ₹1,500-one,seven hundred a quintal relying on the good quality. This is versus the minimal assist value of ₹1,850 set for this season to September.

“We are also obtaining maize to some extent from Karnataka. We were obtaining cargo from Tamil Nadu also but the crop arrivals have appear to an close,” claimed Prakash, whose Rajathi Team exports agri-products and solutions.

Substantial freight price

One more purpose for Indian maize acquiring its way into the South-East Asian nations is surging freight premiums. Traders say that China is at this time accumulating as many containers as doable for all locations, together with the European Union and United States.

China needs these containers to possibly import all its demands or export its products and solutions. Beijing is even having to pay $500 for ferrying an empty container to its ports from areas these kinds of as Colombo in Sri Lanka.

“The outcome of China mopping up all the containers has left India with the benefit of meeting immediate need in the South-East Asian location,” claimed trade analyst Chandrasekaran.

“Malaysia and Vietnam experienced been sourcing maize from nations these kinds of as Brazil, Argentina and Ukraine moreover Myanmar earlier. The container trouble has forced them to turn to India,” he claimed.

The trouble for these nations is that the freight premiums for obtaining maize from these nations is at this time $55-sixty five (₹4,one hundred-four,800) a tonne. Prices for a container are $500 (₹37,200).

“In contrast, freight premiums from India are $twenty (₹1,500) a tonne. The premiums give these nations an arbitrage of $thirty-35 (₹2,250-two,600),” claimed Chandasekaran.

Prakash concurred with Chandrasekharan’s look at on the freight fees.

The recent maize need from these locations are momentary and could proceed for one more six months, he claimed.

Bimal Bengani claimed maize exports to the South-East Asian location would proceed in look at of the competitive premiums offered in India.

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

“Maize from Andhra Pradesh and Karnataka’s Ballari and Raichur regions is being shipped from Chennai. From Kolkata, maize from Bihar is despatched to South-East Asia,” he claimed.

Aside from, the recent forex exchange amount with the rupee depreciating versus the dollar would also favour maize exports from India.

The Indian rupee hit a 9-month small of seventy five.four to the dollar earlier this week. It has dropped in excess of four for every cent in the very last few of months. Nevertheless, it has managed to climb back again above seventy five to the dollar. On Friday, the rupee was quoted at seventy four.70 to the dollar, up 23 paise from Thursday.

Exports & Manufacturing

According to information from the Agricultural and Processed Food items Goods Export Enhancement Authority, an arm of the Commerce Ministry, India’s maize exports surged to a six-year high very last fiscal.

In the course of April-January interval of the fiscal, 22.03 lakh tonnes (lt) of maize were exported with Bangladesh accounting for 14.seventy five lt. Nepal was the second most significant importer, obtaining 5.13 lt, even though Vietnam bought one.11 lakh tonnes. Malaysia imported virtually fifty,000 tonnes.

Maize exports from India dropped since document shipments of 47.88 lakh tonnes in 2012-13. Because then, they have been on a downswing ahead of the turnaround very last fiscal.

The coarse cereal’s exports slipped to underneath ten lakh tonnes since 2014-fifteen, when 28.25 lakh tonnes were shipped out.

According to the Agriculture Ministry’s second progress estimate of generation of foodgrains for this crop year to June, maize generation is most likely to be a document thirty.sixteen million tonnes (mt) versus 28.77 mt very last crop year.

The export state of affairs is in sharp contrast to 2019 when India experienced to import three.eighteen lt, ten instances the shipments into the region the previous year.

Maize imports are permitted by the Union governing administration beneath the tariff amount quota (TRQ) regime at a lessen Customs obligation of fifteen for every cent. Underneath TRQ, 5 lt can be per year.

Over and above this, maize imports bring in fifty for every cent Customs obligation and an supplemental 5 for every cent Built-in Items and Solutions Tax and ten for every cent social welfare surcharge.