Starch makers cheered by stagnant maize export

With export of maize sluggish due to competitive prices and good quality in the international market, the makers of starch, for which it is an input, are optimistic.

Maize export fell 30 per cent in 2014-15. The price abroad is currently $175 a tonne as compared to the Indian price of $220. Partly as a result, the price in India is down by an average of Rs 200 a quintal since April. A further fall is expected with arrival of the new crop.

The price fall would also help poultry and cattle feed manufacturers. "We might replace millets, whose price has spiralled, with corn (maize) in cattle feed," said Mohit Raja, Director, Raja Fat and Feeds, Rajpura.

I K Sardana, president of the All India Starch Manufacturers Association, told Business Standard the extent of damage to the maize crop was not as much as predicted earlier. "The estimated loss due to unseasonal rain and hail is about 10 per cent; it was earlier expected to be 30 per cent. This will help us. We might store the crop to meet the shortages that occur during the end of the season (July to September)," he said.

He put the total annual demand for maize (whose output this year is expected to be about 24 million tonnes) by the starch making industry in India at three million tonnes.

With projections of better maize produce in the US this year, global prices are weak and there is no demand for Indian maize. Sowing in the US is ahead of last year's average.

Meanwhile, US Department of Agriculture in its latest monthly World Agricultural Supply and Demand Estimates report has pegged 2015-16 Indian Maize production at 23.5 mt against 22.5 mt produced during last year.

The rise in production can be attributed to expected increment in yield by 5.37 per cent. Exports for 2015-16 is expected to stay at two mt.