Maize dealers press for changes in import rate

To tide over the current maize crop shortage in the country, maize-based industries are pressing for changes in the import tariff rate quota (TRQ).

"We have asked the government to bring down the import duty to the zero-level on maize under the TRQ and increase the permissible quantity to 1 million tonne," said Amol S Sheth, president, All-India Starch Manufacturers' Association.

The present duty is 15 per cent and the limit is 4 lakh tonne. If the quantity crosses the boundary line, then the import duty goes up to 60 per cent.

Country's domestic maize consumption is 14 million tonne a year. With production at 13 million tonne this year and exports 1 million tonne, the country could face an overall shortage of 2 million tonne. Presently, global prices are on the higher side than the domestic rates.

"We want a duty-free import. At present, import rates are around Rs 9,000 per tonne which is higher than the domestic rates. Less supply and huge demand will affect the starch rates as well," said Kaushik Khona, chief financial officer, Gujarat Ambuja Exports, an agro-processing conglomerate. The domestic maize price is hovering around Rs 7,250 - 7,500 a tonne.

In case the government takes no actions, industry players expressed their helplessness to import even at higher levels.

"By February-end, the country will face the shortage and either we will go for imports at high rates or close down our units," said Damodar Modi, managing director of the Indore-based Tirupathi Starch & Chemicals. Currently.

Amol Sheth said if maize export was not regulated for at least one year, the deficit will only increase. The prevailing mismatch between demand and supply (domestic and global) is only going to take the prices further up.

Market sources said the government might consider maize import through the Agricultural and Processed Food Products Export Development Authority (Apeda).

However, K S Money, chairman, Apeda, said: "So far, we have not been told anything on the subject."

The new maize crushing units, which are coming up in Uttaranchal, Maharashtra and Karnataka will pushed up demand. Reacting to this, Khonathe said: "Demand is huge and the coming year is expected to see firm pricing in the maize market."

However, the recent updates on the crop estimates and acreage on maize have brought some good news. The acreage under maize in rabi crop has increased to 8.59 lakh hectare as on December 17 this year against 6.13 lakh hectare during the same period last year, up by over 40 per cent. However, a month back the acreage figure was down by over 22 per cent.

Similar betterment in the crop scenario has witnessed in the global level too. According to the World Agricultural Supply and Demand Estimates released by the United States Department of Agriculture in December, the corn-production in Argentina and Brazil has raised by 1.5 million tonne and 1 million tonne, respectively.

In Canada, Russia and South Africa, corn production jumped by 0.5 million tonne. A condusive weather and sharp rise in world corn prices pushed up the crop production estimates.

Around 20 per cent of the total maize production goes into the manufacturing of starch and the rest is consumed by the poultry sector and the humans.

Meanwhile, the futures market is showing stability in prices since a fortnight with prices range bound between Rs 750 and Rs 800 a quintal.

On the NCDEX, the January contract closed at Rs 760 a quintal on Tuesday, up by Rs 5 against the previous close.