India corn exports to plummet in wake of rain damage
Traders in Singapore said there are large volumes of rain-damaged corn still held up in destination markets as feed millers have been unable to use the moisture-laden grain.
With dwindling exports and expectations of a record harvest later in September and October, India will have a corn glut that is likely to weigh on domestic prices. Some estimated prices would fall 20 percent from $300 a tonne quoted free on board in Mumbai.
India is estimated to produce an all-time high crop of 22.5 million tonnes in 2013/14, according to the USDA, up marginally from 22.2 million tonnes a year ago.
But even with lower prices after October, Indian corn exports will continue to struggle, traders said. It will not be able to sell much in its peak marketing months of November and December as buyers have already covered supplies.
In order to reach total exports of 3 million tonnes in 2013/14 it needs to ship 300,000 tonnes a month, which is unlikely as the bigger global surplus means more competition.
"There are going to be a whole lot of restrictions imposed on Indian corn even if it is cheaper," the Singapore trader said. "Quality issues are going to make it difficult to trade Indian corn."
Poultry and meat producers, who suffered due to record grain prices last year, are hoping to benefit as the cost of raising animals drops.
"The cost of production in poultry could drop by around 5 percent," said Sanjeev Chintawar, business manager at the National Egg Coordination Committee in the southern city of Hyderabad.