The move is aimed at boosting local supplies as the nation faces a dry spell.
India may have to ban corn exports for a second season to boost local supplies as the crop wilts under the driest monsoon in seven years, a lobby group for US producers said.
“A ban is a real possibility if prices rise further,” Amit Sachdev, India representative of the US Grains Council, said in a phone interview. Trade Secretary Rahul Khullar said he’s not aware of any proposal to bar exports.
A halt in corn shipments from the South Asian country may boost sales for US and Latin American suppliers, supporting prices that have fallen 45 per cent in the past year. A drought in 40 per cent of India’s 626 districts may lower output in the world’s second-biggest producer of rice, sugar and wheat.
“The crop has been hit by lack of rain and it’s bound to affect productivity,” Sachdev said. “It’s a bit too early to say how much the output will decline.”
The council is founded by producer groups and companies including Archer Daniels Midland Co, the top grain processor, to develop export markets for its members.
More From This Section
India sells corn mostly to animal feed makers in countries including Malaysia, Indonesia, Vietnam and Thailand. Shipments have totaled 1 million tonnes since the four-month ban on exports was lifted on October 15.
Overseas sales were banned in July last year after prices surged. Curbs ended after output reached a record 19.3 million tonnes, including a summer crop of 13.9 million tonnes.
‘Cautious’
“It’s quite possible the government becomes cautious about the overall supplies and bans corn exports,” said Vijay Iyengar, managing director at Agrocorp International from Singapore. “We have reasonable stockpiles of rice and wheat, but not for many other commodities.”
The government has purchased a record 30 million tonnes of rice and 25.1 million tonnes of wheat from farmers this year.
Farmers planted corn to 6.75 million hectares as of August 12 compared with 6.59 million hectares a year earlier, according to the farm ministry. Prices have jumped 20 per cent on the National Commodity & Derivatives Exchange (NCDEX) in Mumbai in the past six months on speculation below average rain will reduce production.
In Chicago, corn for December delivery dropped 0.7 per cent to $3.325 a bushel at 3:08 pm Mumbai time. September-delivery futures fell 0.5 per cent to Rs 983.50 a quintal on the NCDEX in Mumbai.
Rice exports
Prime Minister Manmohan Singh’s government halted exports of rice under so-called government-to-government accords last month to meet shortages caused by inadequate rain. Last week, Finance Minister Pranab Mukherjee said the country may import food items such as edible oils and lentils to meet any deficit.
To be sure, rain has returned, narrowing the deficit to 2 per cent in the week ended August 19 compared with 56 per cent in the previous week, the weather office said August 20.
“ Rains in the past few days have considerably improved moisture levels, and the winter crop should be fairly good,” Atul Chaturvedi, president at Adani Enterprises, India’s biggest trader of farm goods, said by telephone. “I don’t see any reason for the government to panic.”