India is considering importing an extra 500,000 tonnes of duty-free corn to overcome a shortage after a second straight drought cut output, a government source said on Wednesday.
India is traditionally a major corn exporter to Southeast Asia, but higher local prices because of the drought and rising domestic demand have halted exports and forced it to import.
In its first international tender, government-backed trader PEC awarded a contract to South Korea’s Daewoo International to supply 250,000 tonnes of duty-free yellow non-genetically modified corn.
“Indian corn prices have shot up massively and actual users have asked us to facilitate corn imports. That’s why the talk of another 500,000 tonnes of imports has started,” the official said.
Local corn prices have jumped about 15 percent so far in June.
The government source, who was not authorized to speak to the media, also said that India was likely to scrap its latest tender to import 50,000 tonnes of corn due to the high price quoted by the sole bidder.
The lowest offer in the tender was $254.55 a tonne on a cost and freight (c&f) basis for shipment to the Adani Tuna terminal in the port of Kandla followed by $255.30 a tonne c&f for shipment to other terminals in Kandla.
The agency was comfortable with price around $230 c&f, said the official, adding “Sourcing non-gm corn is very difficult and will continue to be difficult until at least September when the new crop will arrive in Europe.”
India allows imports of only non-genetically modified varieties.
Indian farmers grow corn twice a year. The winter crop is planted in October, with harvests in March and April. The summer crop planting has started but supplies will become available only from end September.
“Supplies will remain limited until we get new crop. India has to import to check local prices,” said a Mumbai-based dealer with a global trading firm.
“Quality of winter crop is not very good. Starch manufactures can not use a large part of the harvest. They will be the main buyers of overseas corn,” the dealer said.