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

Unrest in Myanmar and high transport prices have resulted in South-East Asian nations around the

Unrest in Myanmar and high transport prices 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 reasons.

“Vietnam, Malaysia, Bangladesh and Sri Lanka are purchasing maize from India,” stated Bimal Bengani, Taking care of Director of Kolkata-centered buying and selling household Bengani Food stuff Merchandise Pvt Ltd.

“Malaysia, Vietnam and Thailand are purchasing Indian maize to meet up with the desire of the rooster and poultry sectors. 1 purpose for these nations around the world to switch in direction of India is the unrest in Myanmar arising out of the Army using more than the administration there,” stated Delhi-centered trade analyst S Chandrasekaran.

These orders have appear to India more than the previous just one-and-a-fifty percent to two months.

“We are acquiring orders from nations around the world this kind of as Malaysia and Vietnam as our charges are aggressive,” stated Bimal Bengani.

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Aggressive charges

Now, maize is staying supplied at $250 a tonne (₹18,600) free-on-board (f.o.b). On the other hand, the cereal is supplied at $275-277 (₹20,450-20,600) value and freight (CNF) to these nations around the world.

On the Chicago Board of Trade, corn futures are at present ruling at $five.89 a bushel (₹17,250 a tonne). According to the Global Grains Council, maize is at present 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 practically 22 for each cent because the beginning of the 12 months, when the IGC maize sub-index has acquired 60 for each cent 12 months-on-12 months.

“Indian maize exports are aggressive because exporters here settle for a lower one-2 for each cent margin,” stated Chandrasekharan.

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M Madan Prakash, President of Agri Commodities Exporters Affiliation, stated that exporters had been at present acquiring maize sent in Chennai from Andhra Pradesh at ₹17,000 a tonne till previous week-conclusion.

At several domestic agricultural current market terminals, maize is ruling among ₹1,500-one,seven hundred a quintal based on the good quality. This is towards the least help cost of ₹1,850 mounted for this season to September.

“We are also acquiring maize to some extent from Karnataka. We had been acquiring cargo from Tamil Nadu also but the crop arrivals have appear to an conclusion,” stated Prakash, whose Rajathi Group exports agri-solutions.

Large freight value

Another purpose for Indian maize discovering its way into the South-East Asian nations around the world is surging freight rates. Traders say that China is at present gathering as a lot of containers as achievable for all destinations, together with the European Union and United States.

China needs these containers to both import all its demands or export its solutions. Beijing is even spending $500 for ferrying an vacant container to its ports from sites this kind of as Colombo in Sri Lanka.

“The final result of China mopping up all the containers has remaining India with the edge of assembly fast desire in the South-East Asian region,” stated trade analyst Chandrasekaran.

“Malaysia and Vietnam had been sourcing maize from nations around the world this kind of as Brazil, Argentina and Ukraine other than Myanmar before. The container dilemma has compelled them to switch to India,” he stated.

The dilemma for these nations around the world is that the freight rates for acquiring maize from these nations around the world is at present $55-65 (₹4,100-4,800) a tonne. Prices for a container are $500 (₹37,200).

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

Prakash concurred with Chandrasekharan’s watch on the freight prices.

The present-day maize desire from these destinations are short term and could carry on for a different 6 months, he stated.

Bimal Bengani stated maize exports to the South-East Asian region would carry on in watch of the aggressive rates supplied in India.

Chandrasekharan stated maize exports had been using put 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 stated.

Aside from, the present-day forex exchange price with the rupee depreciating towards the dollar would also favour maize exports from India.

The Indian rupee strike a nine-thirty day period lower of seventy five.4 to the dollar before this week. It has dropped more than 4 for each cent in the previous pair of months. Even so, it has managed to climb again above seventy five to the dollar. On Friday, the rupee was quoted at 74.70 to the dollar, up 23 paise from Thursday.

Exports & Manufacturing

According to data from the Agricultural and Processed Food stuff Merchandise Export Improvement Authority, an arm of the Commerce Ministry, India’s maize exports surged to a 6-12 months high previous fiscal.

Throughout April-January interval of the fiscal, 22.03 lakh tonnes (lt) of maize had been exported with Bangladesh accounting for fourteen.seventy five lt. Nepal was the second major importer, purchasing five.13 lt, when Vietnam bought one.11 lakh tonnes. Malaysia imported practically fifty,000 tonnes.

Maize exports from India dropped because document shipments of forty seven.88 lakh tonnes in 2012-13. Because then, they have been on a downswing ahead of the turnaround previous fiscal.

The coarse cereal’s exports slipped to under 10 lakh tonnes because 2014-fifteen, when 28.twenty five lakh tonnes had been shipped out.

According to the Agriculture Ministry’s second advance estimate of output of foodgrains for this crop 12 months to June, maize output is probable to be a document thirty.16 million tonnes (mt) towards 28.seventy seven mt previous crop 12 months.

The export scenario is in sharp contrast to 2019 when India had to import 3.18 lt, 10 occasions the shipments into the state the past 12 months.

Maize imports are allowed by the Union governing administration beneath the tariff price quota (TRQ) routine at a decrease Customs responsibility of fifteen for each cent. Underneath TRQ, five lt can be yearly.

Over and above this, maize imports entice fifty for each cent Customs responsibility and an added five for each cent Built-in Items and Products and services Tax and 10 for each cent social welfare surcharge.