Duty cut likely to spur import of maize

The government's decision to scrap customs duty on corn could result in imports of about 25 lakh tonnes of maize to bridge the demand-supply gap that was caused due to the exports of maize from the country, the poultry industry says.

"We exported 8-10 lakh tonnes of maize during the current financial year and that contributed to the domestic shortfall of maize. We welcome government's decision to allow duty free import of the corn," poultry major Suguna Group Managing Director B Soundarajan said from Coimbatore.

Soundarajan said the imports in all probability would take place around April when the country would witness huge scarcity of maize.

He said the prices of domestic maize are lower than the international prices, though the imports may not lead to any rise in prices in the global market.

"Imports of 20-25 lakh tonnes will not have any major impact in the international prices as the quantity is not considered huge," Soundarajan said adding the global prices may veer around Rs 9500-11000 a tonne when India starts importing the produce.

While the domestic prices are ruling around Rs 8,000 per tonne as against Rs 5,500-6,000 per tonne last year, the international maize prices are currently ruling at around Rs 10,000 per tonne, he said.

"Obviously, we don't expect the domestic prices of maize to come down in a situation where international prices are higher than the domestic prices," he said.

However, an official of Poultry Federation of India said prices of maize might subsequently ease as a fallout of the government's decision to allow duty-free import of maize.

"It (the scrapping of import duty) is a very good decision. The rates of maize are expected to go down as fresh stocks would come in the market," Poultry Federation of India Treasurer Ricky Thaper said.

The cost of production for the poultry industry would reduce as it uses maize for feed, he said, adding the industry produces 15 million tonnes of feed annually, of which about 50 per cent is through use of maize as a main ingredient.

All India Starch Manufacturers' Association President, Amol Sheth said: "The decision to allow imports at zero customs duty has given the user industries an another option of sourcing the availability of maize."

"It all depends on pricing and demand. We will start receiving serious quotes from international markets in next few days," he said.

Sheth demanded that the government should regulate the exports of maize to Bangladesh.

Maize production for 2006-07 Kharif season is estimated at 11 million tonne and if added with Rabi crop, the expected crop size would be 12.4 million tonnes. In contrast, the demand is expected to be around 14 million tonne, according to the industry.

Poultry sector accounts for the highest demand for maize at about seven million tonnes, followed by human consumption at 3.6 million tonnes. Demand from livestock and starch sectors is about 1.45 million tonnes each.