Imported maize prices are 20 per cent higher than the prices in the domestic market despite the recent appreciation of the rupee that helped narrow down the disparity between the global and the domestic prices of the commodity. Maize imports, hence, continue to remain unviable. | |
| A couple of months ago, the factory landing rate of imported maize for starch manufacturers was around Rs 11,000 a tonne, which now has dropped to below Rs 10,000 a tonne. Despite the decline in prices, starch manufacturers do not see imports as a viable option. |
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| "At Kandla port, the average freight on board (FOB) cost of maize is around Rs 8,800. Add around Rs 1,000 a tonne as local freight and transportation costs, which will take the factory landing price to Rs 9,800 a tonne against the prevailing domestic price (factory rate) of Rs 8,200 a tonne," said Kaushik Khona, chief financial officer of Gujarat Ambuja Exports. "This difference of Rs 1,600 a tonne makes imports not viable at present," he added. |
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| Vishal Majithia, managing director of Mumbai-based Sahyadri Starch, also ruled out the possibility of importing at these rates. The FOB rate of the crop from Argentina is around $202-206 a tonne, whereas that of the US crop is $210-215 a tonne. |
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| According to market sources, the gap between the imported and the domestic prices may not narrow down further. Maize was in big demand in the USA, the largest producer of the crop, owing to rising demand from ethanol-producing facilities there. In such a situation, one could not expect prices in America to go down, they added. |
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| "The combined crop from Argentina and Brazil makes up only 20 per cent of the global output and it is not sufficient for any further slip in the global prices," said Khona. Last year, only 5 per cent of the world's total maize crop was used for ethanol production. This year, however, more than 15 per cent of the global output would go towards ethanol production, he added. |
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| The country already has a scarcity of around 2 million tonne. Market sources said that coming months would see a further rise in maize prices. Analysts opined that imports would be opted only if the domestic rates went up further. |
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