Rise in global corn prices to spur export contracts.

New Delhi: A surge in global corn prices and expectations of a drop in domestic rates will help India seal more export deals in the coming weeks, traders and analysts said on Monday.

Benchmark corn prices in Chicago surged as much as 45 cents to hit a high of $5.73- a bushel, the highest since September 24, 2008, and trading limit up for the second straight day.

“With the rise in global prices and likelihood of a drop in domestic prices, more and more export deals will be signed in the next 10-15 days,” Punam Chand Gupta, a trader from Nizamabad, Andhra Pradesh, said.

Gupta said local prices were expected to drop to Rs 9,500 ($214) per tonne within the next 15 days from Rs 10,400 now due to the arrival of the summer-sown variety.

India, started its new-crop corn export marketing season with sales of about 1,00,000 tonne to Southeast Asia. India's share in the estimated 90 million tonne global corn trade is small, but Southeast Asian countries such as Malaysia, Indonesia, and Vietnam often seek prompt shipments for feed use from the South Asian neighbour.

Helped by a rebound in output due to plentiful monsoon rains, India is expected to export 2-3 million tonne of corn in the new year that began in October against 1 million tonne in 2009-10.

Last month the government forecast summer-sown corn output at 14.06 million tonne, up from 12.00 million tonne.

“Exports will definitely be higher this year not only due to an increase international prices and lower domestic prices, demand is also robust from India's traditional buyers in southeast Asia,” said Veeresh Hiremath, a senior analyst with Hyderabad-based brokerage Karvy Comtrade.

“The country's inability to move large stocks to ports would cap exports,” said Amit Takkar, assistant vice-president of Adani Enterprises, a leading exporter of farm products.

“We could have thought of even more export deals but logistics is an issue. Transporting large consignments to ports is not easy,” he said. Takkar also said Indian shipments would face competition from Thailand by December-January, when the Thai crop arrives.

Source : www.financialexpress.com