 "Maize shortage hits starch makers")
Starch manufacturers are facing a shortage of maize, the primary ingredient, whose price has touched a record high of Rs 1,850 a quintal and is expected to move higher, in the wake of supply constraints.
I K Sardana, president of the All India Starch Manufacturers Association says maize is mainly grown in the rain-fed areas of Bihar, Maharashtra, Andhra Pradesh and Karnataka. Two years of drought have curtailed supply. The price is normally around Rs 1,500 a quintal in this season and starts moving up in August. This year, low availability due to crop failure and stocking by global entities operating in India has posed a problem.
According to trade estimates, the crop for the current season is 17 million tonnes, against the domestic demand of 20 mt. As there were no carryover stocks from last year, due to less production from scanty rain and lower sowing, the industry is in a tight spot. Nor is it able to revise the price of starch, as the contracts for these are signed well in advance and cannot be revised in the middle of the season.
Sardana said they’d had a meeting with Union commerce and industry minister Nirmala Sitharaman on Wednesday, asking her to allow 500,000 tonnes of import by actual users, which she’d approved in principle. However, this could take six to eight weeks and many manufacturers might not be able to sustain operations at the current price for longer, he said.
Vishal Majithia, director, Sahyadri Starch Industry, Maharashtra, said the new crop would arrive in October/November, by when many small mills would have shut down.
A trade analyst said approval for import might not be of much help. Ukarine’s crop is over, as this is the end of the season. American maize is available but it would be a GM crop. Even if GM crop import for the industry was allowed, a demand for 500,000 tonnes in a short span would trigger a price rise. The landed cost of US maize at Indian ports is $220 a tonne today but could inflate if demand surges.
‘’The non-GM condition has put India with limited origins in the world for importing corn (maize). With Ukraine’s crop coming to an end, how much they will be able to ship promptly will have to be seen,’’ said Rajiv Yadav, vice-president with Noble Resources.
The government needs to change the policy on GM maize import, for processing and livestock feed as is practiced world over, the analyst added.
