India begins importing Myanmar corn duty-free to meet surging demand

India has begun importing corn (maize) from neighbouring Myanmar duty-free. At least three ships have arrived so far at VO Chidambaranar Port in Tamil Nadu’s Thoothukudi and a few more are set to drop anchor by July-end.

• Also read:‘Rising incomes, changing food preferences to fuel India’s demand for grains, proteins’ 

“Corn from Myanmar has begun arriving. Deals have been struck and three ships have already arrived. Another 10 are likely to arrive per deals signed till now,” said Vangili Subramanian, Tamil Nadu Egg Poultry Farmers Marketing Society (PFMS) president. 

Initially, imports were made at $268 a tonne but prices have now increased. When contacted, Sanjay Sancheti, Country Head, Olam Agro India Ltd, said, “We have brought in one shipment from Myanmar.” Asked if the imports were at $268, he said prices have gone up.

“I got an offer to buy 10,000 tonnes of Myanmar maize at $286 for delivery in July. But we did not opt for it,” said M Madan Prakash, President, Agri Commodities Exporters Association. His firm Rajathi Group deals in imports and exports of agricultural produce such as corn. 

Import duty for other origins

Olam is among the international trading firms that are bringing the coarse cereal into the country. “Imports from Mynamar are allowed duty-free as it is considered a least developed country,” said an international trading house official without wishing to be identified. 

If corn is imported from any other country, the Customs Department imposes a 60 per cent duty besides a 5 per cent IGST and 10 per cent social welfare surcharge. However, the Centre allows tariff rate quota (TRQ) imports at 15 per cent concessional duty. In 2020, it allowed imports of 5 lt of corn under TRQ. 

Imports of maize, which could be nearly three lakh tonnes going by the deals signed, can be duty-free if it can be re-exported as starch. “The first ship from maize was meant for starch,” the official said, adding that the second one was for ethanol production. “There is demand from the Tamil Nadu poultry sector. Some of the poultry firms in the State have procured the imported corn,” said Subramanian. On his part, he has sourced corn from Bihar for his needs.

Import parity

“I get it here (Namakkal in Tamil Nadu) at ₹26,000 a tonne. Imports have been at the same rates,” said the PFMS president. Trade sources said there is good demand for corn from starch manufacturers, ethanol producers and the poultry sector. 

Currently, the weighted average price of maize across agricultural produce marketing committee (APMC) yards in the country is ₹2,091 a quintal against the minimum support price of ₹2,090. However, in some of the APMCs in Madhya Pradesh, Tamil Nadu, Telangana, Maharashtra and Karnataka, they are ruling higher at over ₹2,400. During the same time last year, its prices were ₹1,700.

On the Chicago Board of Trade, corn July contracts are ruling at $4.49 a bushel ($176.76 or ₹14,775 a tonne). “Maize imports are required to meet the rising demand,” said Subramanian.

Sounding caution

S Chandrasekaran, a New Delhi-based trade analyst, said the import of corn “through arbitrage of price and preferential import tariff is a comprehensive market distortion”. The government needs to take a cautious approach on corn imports by coming up with port restrictions and fixing minimum import price, he said. 

Eastern and southern Indian farmers have been affected over the past two years due to climate change. With the monsoon forecast to be normal, farmers expect to reap good harvest and better income, he said, justifying the demand for the curbs. 

According to traders, the rabi maize crop has been affected due to the vagaries of the weather in Bihar and West Bengal. The crop could be 10 per cent lower in those States. However, the PFMS president said the Bihar crop is good. 

The Ministry of Agriculture and Farmers Welfare, in its third advance estimate earlier this week, has pegged maize production at 35.67 million tonnes (mt) this crop year ending this month against 38.08 mt last year. 

Mulling GM corn imports

Demand for corn in the country has been increasing with the poultry sector alone needing an additional 1 mt every year. Currently, its demand is estimated at around 16 mt. 

Apart from the poultry sector, the starch manufacturing industry and ethanol manufacturers also need corn. This year, in particular, demand for corn from the ethanol sector has increased after the Centre banned the use of sugarcane juice in the manufacture of ethanol. 

The ethanol sector used 0.8 mt of corn last fiscal and this is expected to increase to 3.4 mt this fiscal before rising to 10 mt by 2027-28..

• Also read:India mulling to allow GM corn imports at lower duty to bridge supply deficit

The international trading house official said once ethanol manufacturing units, particularly in Bihar, began importing corn, the shipments will likely land in Visakhapatnam or Kolkata ports.

On May 31, businessline reported that the Centre is considering allowing the import of genetically modified (GM) corn at a lower import duty if not at zero duty to bridge the supply deficit owing to rising consumption in the country.