Starch industry opposes maize exports

Domestic starch manufacturers and the poultry industry have voiced their concerns over the exports of maize. They fear that this will lead to the last year's situation, when maize prices in the country touched exorbitant levels.

The country is expecting around 13 million tonnes of maize in the current season, an increase of around 12-14 per cent against last year's output of over 11 million tonnes. Though the production was on the higher side, it was not enough to allow exports, said starch manufacturers.

"It is ridiculous to go for maize exports. It will bring an artificial jump in the maize prices. We will take a stand in order to ban maize exports," said Kaushik Khona, chief financial officer, Gujarat Ambuja Exports.

The starch industry is growing with a rate of 12-14 per cent. In a letter to the Department of Commerce, the industry representatives have requested the government to intervene in the matter and ensure maize availability in the domestic market. 
 

CLARION CALL Investment and capacity additions in maize crushing
Company	Existing capacity	Addition	Investment (Rs crore)
	(tonnes per annum)
Riddhi Siddhi	2,81,000	1,65,000	100
Gujarat Ambuja	1,80,000	1,80,000	65
Bharat Starch	82,800	1,80,000	250
Sahyadri Starch	90,000	54,000	27
Sanghvi Foods	Nil	72,000	41

"With the rise in demand, the country may face shortage of maize. Under such circumstances, it is all the more desirable for the government to stop maize exports. If we export maize at a price of Rs 7,500- Rs 8,000 a tonne, we will be importing the same at Rs 10,000 to Rs 12,000 a tonne in the coming years," the letter said.

Amol S Sheth, president, All India Starch Manufacturers' Association, said, "We want the government to give preference to exports of finished products and not not maize as a commodity." He added that demand for maize was going up and domestic availability should be ensures first.

China and the US, the two top consumers of maize, have stopped exports. Under such circumstances, industry sources questioned the rationale of maize exports.

In India, top starch players including Riddhi Siddhi Gluco Biols, Gujarat Ambuja Exports, Sahyadri Starch and Bharat Starch Industries are adding up to 6 lakh tonnes of maize crushing capacities.

Rising demand for starch has made the industry to go for expansion. Even those, who do not have fresh projects, are expected to increase their capacity utilisation. "This will surely push the demand for maize," said Khona.

O P Singh, former CEO of Venkateshwar Hatcheries, a leading player in the domestic poultry industry, said, "Maize exports will create crunch of availability in the country leading to unaffordable prices. Demand from poultry industry on a year-on-year basis is rising by 17 per cent but the production is not keeping the pace."

Starch industries demand for maize, which stood at 1.45 million tonnes last year, is set to reach 2.4 million tonnes this season.

"Starch players are setting plants to manufacture value-added products. Overall maize crushing capacity is to rise to 3.8 million tonnes from 2.2 million tonnes. In case maize is exported, it can put at risk the project viability of the new plants," added Singh.

Arrival of kharif crop has started in small quantity in some mandis of Andhra Pradesh. Moisture levels are reported to be in the range of 16-18 per cent against the standard 12 per cent. The recent spell of showers in Andhra, Karnataka and Maharashtra may further affect the quality of crop.

Market sources said higher moisture content could be one of the factors responsible for numbing of prices. According to starch manufacturers, arrivals will pick momentum in November.

On the National Commodities and Derivatives Exchange, the near month contract closed at Rs 707 a quintal against the previous close of Rs 715.