India's corn exports to drop by 60 percent

India's corn exports could drop by 60 percent in the year to September due to a poor domestic crop, quality issues, lower global prices and good crop prospects overseas, traders and industry officials said on Thursday. Exports of corn from India, a leading supplier of the grain to the south-east Asia and the Middle East, could fall to 1.0-1.3 million tonnes from 2.5 million tonnes a year earlier.
"Likely exports are between 1.0-1.3 million tonnes due to late harvests because of the drought and rising domestic demand," Amit Sachdev, India representative of the US Grains Council, told Reuters.
Local demand was likely to rise 5 percent this year from 17 million tonnes a year ago, Sachdev said, while lower international prices and expectations of good production in the United States and South America would also hit exports. The government has forecast the summer-sown corn crop, which makes up about 80 percent of annual output, would fall 9.3 percent to 12.6 million tonnes after the weakest monsoon rains since 1972.
On Tuesday, the USDA projected US corn plantings at 88 million acres (35.6 million hectares), up 1.5 million acres from 2009, for a crop of 12.96 billion bushels. It would be the third-largest crop on record, after 2009 and 2007. Expectations of bumper crops in Brazil and Argentina, the world's largest exporters of corn behind the US, have been pressuring Chicago Board of Trade futures for several weeks. On Wednesday, CBOT corn for March delivery fell more than 3 percent as output forecasts for Brazil and Argentina were raised.
Michael Cordonnier, a respected US analyst, forecast Brazil's 2009/10 crop output at 51.5 million tonnes and Argentina's at 18.5 million tonnes, higher than the USDA's forecasts. A leading Bangalore-based trader said exports would fall because Indian corn was "hugely uncompetitive", noting it was selling at $217 per tonne free on board against $167 per tonne FOB in the United States.
"I expect exports somewhere between 1 million and 1.3 million tonnes, and that too primarily from buyers in Bangladesh, Sri Lanka and Malaysia," the trader said. An official from a leading exporter of farm products said there may be exports to neighbouring countries such as Nepal, Bangladesh, Sri Lanka once the winter-sown corp is harvested. Indian exports have also been hit by quality issues. More than 100,000 tonnes of Indian corn set to be exported to Southeast Asian countries were rejected at local ports last month due to the poor quality, sources said.