May 26, 2024

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

Unrest in Myanmar and large shipping and delivery fees have resulted in South-East Asian nations around the world and Bangladesh turning to India to meet up with their maize (corn) desire for feed purposes.

“Vietnam, Malaysia, Bangladesh and Sri Lanka are getting maize from India,” claimed Bimal Bengani, Managing Director of Kolkata-primarily based buying and selling residence Bengani Foods Products and solutions Pvt Ltd.

“Malaysia, Vietnam and Thailand are getting Indian maize to meet up with the desire of the rooster and poultry sectors. 1 motive for these nations around the world to turn in the direction of India is the unrest in Myanmar arising out of the Army taking about the administration there,” claimed Delhi-primarily based trade analyst S Chandrasekaran.

These orders have arrive to India about the final just one-and-a-50 percent to two months.

“We are getting orders from nations around the world this sort of as Malaysia and Vietnam as our charges are aggressive,” claimed Bimal Bengani.

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Competitive charges

At present, maize is staying available at $250 a tonne (₹18,600) no cost-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 nations around the world.

On the Chicago Board of Trade, corn futures are at this time ruling at $5.89 a bushel (₹17,250 a tonne). In accordance to the Intercontinental 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 charges have acquired approximately 22 for each cent given that the beginning of the calendar year, whilst the IGC maize sub-index has acquired sixty for each cent calendar year-on-calendar year.

“Indian maize exports are aggressive given that exporters right here settle for a lower 1-two for each cent margin,” claimed Chandrasekharan.

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

At many domestic agricultural market place terminals, maize is ruling concerning ₹1,500-1,700 a quintal relying on the high quality. This is versus the minimum assist selling price of ₹1,850 set for this season to September.

“We are also getting maize to some extent from Karnataka. We were getting cargo from Tamil Nadu also but the crop arrivals have arrive to an end,” claimed Prakash, whose Rajathi Team exports agri-items.

Substantial freight charge

Another motive for Indian maize obtaining its way into the South-East Asian nations around the world is surging freight costs. Traders say that China is at this time amassing as lots of containers as possible for all destinations, including the European Union and United States.

China desires these containers to both import all its demands or export its items. Beijing is even shelling out $500 for ferrying an empty container to its ports from destinations this sort of as Colombo in Sri Lanka.

“The consequence of China mopping up all the containers has still left India with the gain of meeting rapid desire in the South-East Asian region,” claimed trade analyst Chandrasekaran.

“Malaysia and Vietnam had been sourcing maize from nations around the world this sort of as Brazil, Argentina and Ukraine in addition to Myanmar before. The container challenge has pressured them to turn to India,” he claimed.

The challenge for these nations around the world is that the freight costs for getting maize from these nations around the world is at this time $fifty five-65 (₹4,a hundred-4,800) a tonne. Rates for a container are $500 (₹37,200).

“In contrast, freight costs from India are $20 (₹1,500) a tonne. The costs give these nations an arbitrage of $30-35 (₹2,250-two,600),” claimed Chandasekaran.

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

The existing maize desire from these destinations are short-term and could carry on for an additional six months, he claimed.

Bimal Bengani claimed maize exports to the South-East Asian region would carry on in look at of the aggressive costs available in India.

Chandrasekharan claimed maize exports were taking place from the east coastline ports of Kolkata and Chennai.

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

Other than, the existing forex trade charge with the rupee depreciating versus the greenback would also favour maize exports from India.

The Indian rupee hit a nine-thirty day period lower of 75.4 to the greenback before this 7 days. It has dropped about 4 for each cent in the final few of weeks. Having said that, it has managed to climb again higher than 75 to the greenback. On Friday, the rupee was quoted at 74.70 to the greenback, up 23 paise from Thursday.

Exports & Generation

In accordance to facts from the Agricultural and Processed Foods Products and solutions Export Improvement Authority, an arm of the Commerce Ministry, India’s maize exports surged to a six-calendar year large final fiscal.

Through April-January period of the fiscal, 22.03 lakh tonnes (lt) of maize were exported with Bangladesh accounting for fourteen.75 lt. Nepal was the 2nd greatest importer, getting 5.thirteen lt, whilst Vietnam acquired 1.eleven lakh tonnes. Malaysia imported approximately 50,000 tonnes.

Maize exports from India dropped given that report shipments of forty seven.88 lakh tonnes in 2012-thirteen. Because then, they have been on a downswing before the turnaround final fiscal.

The coarse cereal’s exports slipped to beneath 10 lakh tonnes given that 2014-fifteen, when 28.25 lakh tonnes were shipped out.

In accordance to the Agriculture Ministry’s 2nd advance estimate of output of foodgrains for this crop calendar year to June, maize output is possible to be a report 30.16 million tonnes (mt) versus 28.77 mt final crop calendar year.

The export scenario is in sharp contrast to 2019 when India had to import three.eighteen lt, 10 occasions the shipments into the state the earlier calendar year.

Maize imports are authorized by the Union government below the tariff charge quota (TRQ) regime at a reduced Customs obligation of fifteen for each cent. Below TRQ, 5 lt can be yearly.

Beyond this, maize imports draw in 50 for each cent Customs obligation and an further 5 for each cent Built-in Products and Solutions Tax and 10 for each cent social welfare surcharge.