Global buyers could shun Indian maize

With global maize prices ruling lower than the Indian minimum support price (MSP), international buyers are unlikely to come to India to purchase the commodity, experts said.

Global buyers would maximum shop one million tonnes from India, not even half of last year's volume, they said.

“When the US is offering maize 14 per cent lower than the India’s benchmark price of Rs 840 a quintal, why would any buyer come here?” India representative of the US Grains Council Amit Sachdev said.

Mandi price of maize in India was ruling at Rs 840 levels, which was MSP fixed by the government, while global rates at Chicago Board of Trade as on October 16, were at Rs 737 a quintal free on board, he said.

“The lack of parity in prices may compel buyers to pre-fer the US than India,” he said, adding overseas sale may not touch last year's level even after lifting the ban on exports.

In July this year, India had prohibited export of maize for four months till October 15, to contain inflation which was hovering at double-digit level. After the expiry, the government has not extended the ban.

All India Starch Manufacturers Association President Amol S Sheth said, “Right now, it is difficult to say how much India will sell maize abroad.

We see exports to be about one million tonnes during maize season (October-September) 2008-09. However, we will get a clearer picture by December-end.”

Last year, there was a record export of over 3 million tonnes and India remained the most preferred destination for maize buying, market observers said.

“In contrast, buyers are gradually shifting to the US as maize is available there at much lower price than India,” they said, adding India's export could rise if CBoT prices improve in the coming weeks.

Projecting on price trend in the coming days, Sheth said domestic maize rates would hover between Rs 840 and Rs 875 a quintal. It is unlikely to cross Rs 900 a quintal level, he added.