Corn Exports to Rise as Feed Prices Climb.

Singapore, New Delhi: India's corn exports are set to climb as Asian feed producers scramble to lock in cheaper cargoes in the face of strengthening global grain prices and a lack of feed wheat from the drought-parched Black Sea area.

The country could sell more than 3 million tonne of corn in the year to September 2011, a two-fold jump from a year ago, which will give buyers some respite from US prices that are near 2-year highs.

“Buyers are certainly going to be looking at getting supplies from the cheapest source which can deliver reliably,” said Luke Mathews, commodity strategist at Commonwealth Bank of Australia. And if that turns out to be India, then it's certainly something buyers are going to be looking towards.

A tight world corn balance and firming prices amid prospects of bumper production in India this year make a perfect case for buying corn from the nation, a challenge to pricey US and South American cargoes.

Asian millers have started snapping up Indian corn cargoes in the past few weeks, buying around 1,00,000 to 1,50,000 tonne between $240 and $250 a tonne, including cost and freight (C&F). This compares with $260 to $270 a tonne offered for Argentine corn.

“India is regularly selling, there is business happening in containers every day,” said one trading manager at an international trading company, which sells feed grains into Asia. In fact, very few deals of South American corn have taken place to Southeast Asia as India is active.

India's share of world corn trade of around 90 million tonne is small, but the nation is a significant supplier to buyers such as Malaysia, Vietnam and Indonesia that seek small parcels for prompt shipment.

Asian millers have been trying to source alternative origins for grain after a ban in exports from drought-hit Russia and a squeeze in supplies from Ukraine—key origins for feed wheat—threatened to cut off supplies of feed grains.

Source : financialexpress.com