EU seeks to import corn from India

European Union is looking to import corn from India, which is non- GM, but finds the prices to be relatively higher. As the impact of global food inflation is beginning to extend to corn prices, India has potential to expand its trade.

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The demand for corn has increased as the European Union looks to have supplies from India, as the nutria-cereal crop cultivated in the country is free of any genetic modification. Europe, which wants the grain for feed purposes is finding the prices higher than the counterparts.

Amid the global food insecurity, due to the war in Ukraine and supply chain disruptions, the demand for the substitute crop, corn, has increased leading to surge in prices. The contracts for July corn futures were trading above US $8 bushel, which was traded at US $6 per bushel at the start of the year.

With 52% share in world exports, US has profound effect on global demand- supply balance sheet. The increased diversion of crop in ethanol production, about 40% in 2011-12, from 6% in 2000-1 has exerted pressure on crop’s price. The poor monsoon in India and increased correlation with corn futures has shot up domestic prices by 30%.

Indian maize production has grown at a CAGR of 49% in 2017-21, with Karnataka, Andhra Pradesh, Maharashtra and Bihar being the major producing states. India has faced problems  in exports to the  largest importing nations Bangladesh with 37.9% share in exports and Nepal (14.6%) due to fear of high prices and further rise in future. 

After couple of months, the demand from Vietnam, Malaysia is seen rising again, with lower quoted prices for bulk commodities. The weighted average of corn prices has currently declined to ₹1930 below MSP of ₹1962

With the ongoing price rise for the cereal crop, there a grim situation for small importers. Potential can be seen with large and more established players.