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India begins duty-free import of Myanmar corn to meet surging demand

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India has begun importing corn duty-free from neighbouring Myanmar. At least three ships have so far arrived at VO Chidambaranar port in Thoothukudi in Tamil Nadu, with several more due to arrive by the end of July.

“Maize from Myanmar has started arriving. Contracts have been awarded and three vessels have already arrived. Ten more vessels are likely to arrive based on the contracts signed so far,” said Bangiri Subramanian, president, Tamil Nadu Egg and Poultry Farmers Marketing Society (PFMS).

Initially, the import price was $268 per tonne, but it has now increased. When contacted, Sanjay Sancheti, Country Head, Olam Agro India, said, “We have imported one shipment from Myanmar.” When asked if the import price was $268, he said the price has increased.

“We received an offer to buy 10,000 tonnes of Myanmar corn for July delivery at $286 a ton, but we didn’t take it,” said M. Madan Prakash, chairman of the Agricultural Exporters Association, whose company, Rajathi Group, handles the import and export of corn and other agricultural products.

Import duties for other origins

Olam is one of the international trading companies that imports coarse grains into Myanmar. “Imports from Myanmar are allowed duty-free as the country is considered a least developed country,” said an official from an international trading company, who asked not to be named.

When maize is imported from other countries, the Customs Department levies a customs duty of 60% in addition to IGST of 5% and Social Welfare Surcharge of 10%. However, the Central Government allows Tariff Rate Quota (TRQ) imports at a preferential customs duty of 15%. In 2020, import of 5 litres of maize was allowed under TRQ.

As per the agreement signed, maize imports could be around 300,000 tonnes but would be duty-free if it can be re-exported as starch. “The first ship loaded with maize was for starch,” the official said, adding that the second was for ethanol production. “There is demand from the poultry sector in Tamil Nadu. Several poultry companies in the state are sourcing imported maize,” Subramanian said. Subramanian sources maize from Bihar for his own needs.

Import Parity

“Here (Namakkal in Tamil Nadu), you can get it for Rs 26,000 a tonne. Imports are also at the same price,” the PFMS chairman said.Industry sources said demand for maize is high from starch manufacturers, ethanol producers and the poultry industry.

Currently, the weighted average price of maize at Agricultural Produce Marketing Committee (APMC) premises across the country is Rs 2,091 per quintal against the minimum support price of Rs 2,090. However, in some APMCs in Madhya Pradesh, Tamil Nadu, Telangana, Maharashtra and Karnataka, it is being traded at over Rs 2,400 per quintal. The price during the same period last year was Rs 1,700.

On the Chicago Board of Trade, July corn contract was trading at $4.49 a bushel ($176.76 or Rs 14,775 a tonne).โ€œWe need corn imports to meet growing demand,โ€ Subramanian said.

Issue a warning

S. Chandrasekaran, a New Delhi-based trade analyst, said corn imports are “being conducted through price arbitrage and preferential import duties, resulting in full market distortions.” He said the government needs to take a cautious approach to corn imports by imposing port regulations and setting a minimum import price.

Farmers in eastern and southern India have been affected by climate change over the past two years, and with a normal monsoon forecast, farmers are hoping for better harvests and higher incomes, so the calls for restrictions are justified, he said.

Traders said the rabi corn harvest has been affected due to weather fluctuations in Bihar and West Bengal. The yield in both states is likely to fall by 10 percent. However, the PFMS chairman said the yield in Bihar is good.

In its third flash estimate released earlier this week, the Ministry of Agriculture and Farmers Welfare projected corn production for the year ending this month at 35.67 million metric tons, up from 38.08 million metric tons last year.

Considering import of genetically modified corn

Domestic demand for maize is increasing, with the poultry sector alone requiring an additional 1 million tonnes per year. Currently, demand is estimated at around 16 million tonnes.

Besides the poultry sector, corn is also needed by the starch and ethanol manufacturing industries, which has seen an increase in corn demand this year, especially after the central government banned the use of sugarcane juice in ethanol production.

The ethanol sector used 0.8 million tonnes of corn in the last fiscal year, which is expected to increase to 3.4 million tonnes in the current fiscal and 10 million tonnes by 2027-28.

Sources with international trading companies said consignments were likely to land at Visakhapatnam or Kolkata ports, especially if ethanol plants in Bihar start importing corn.

May 31st, Business Line The spokesman reported that the government is considering allowing imports of genetically modified (GM) corn at low, if not zero, import duties to make up for supply shortages caused by rising domestic consumption.

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