Cheaper Indian maize finds favour in Taiwan

India has exported around 18,000 tonnes of maize to Taiwan so far in the current marketing year that commenced October, and is likely to get a wider share in the country’s market as Taiwan cuts its dependence on the US corn, a trade official said on Wednesday.

The official said the south-east Asian country has imported about 2.5 million tonnes of corn so far since October to meet corn syrup and animal feed requirements, most of it from the US—its traditional supplier.

He said the trend, however, has changed, and the country has now started seeking corn shipments from its Asian neighbours due to cost and freight advantage and shorter delivery period, a move that has benefited India.

The official said India is able to offer maize to Taiwan at about $210-215 a tonne, inclusive of cost and freight, due to a drop in local prices, lower than the US offer of $230 a tonne.

He said India’s ability to offer the coarse grain to Taiwan in containers of lot sizes ranging from 6,000-10,000 tonnes is also working in its favour. “Going by the current pace of export, I think we’ll be able to capture at least 10 per cent of the Taiwan’s maize import market this year,” the official said.

According to the US Department of Agriculture, Taiwan is likely to import around 4.3 million tonnes of maize in the current year that ends September 30.

Despite a slow start at the beginning of the season, India’s maize exports to southeast Asian countries have picked up over the last few months due to rising prices of corn in US—the largest maize exporter in the world.

US corn prices have started firming up since the last 1-2 months due to the slow pace of sowing for the new crop and a likely drop in global stocks.

According to the International Grains Council, global maize output in FY10 is likely to fall to 778 million tonnes, lower than the estimated global consumption of 791 million tonnes.

Maize ending stocks in FY10 are also seen falling sharply to 129 million tonnes, the lowest in 10 years.

Concerns over a deficit in FY10 have pushed up the benchmark front month corn contract on the Chicago Board of Trade (CBOT) to $4.35 a bushel, up from $3.80 a bushel last month.

Corn prices are seen rising in the coming months and the December delivery CBOT corn is already trading at a premium over the front month contract at $4.58 a bushel.