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India, Asia’s biggest corn exporter, may ship less grain than predicted this year after pests spurred Vietnam to reject some cargoes and as the strengthening rupee boosted prices, according to a traders’ group.
Sales in the year that began on Oct. 1 will trail the 3 million metric tons estimated in November, said Pravin Dongre, president of the India Pulses & Grains Association. The country exported 2.5 million tons in 2010-2011, he said in a phone interview in Mumbai.
Futures lost 10 percent in the past year in Chicago as record global corn production cut demand for the livestock-feed ingredient from the U.S., the largest producer and exporter. Vietnam may boost imports from South America and Ukraine after turning back a couple of Indian cargoes, citing the presence of live khapra beetles, an insect that destroys grain, Dongre said.
“Earlier if there were 10 buyers, then 10 shippers were willing to export to Vietnam,” said Dongre. “With this issue, shippers are very hesitant.”
Vietnam is the third-largest buyer of Indian corn after Indonesia and Malaysia, he said. The country may halt imports if India persists in sending infected cargoes, said Nguyen Xuan Hong, head of the plant protection department at the Ministry of Agriculture and Rural Development.
“We didn’t let some cargoes with khapra beetles go through recently,” he said by phone. “If India continues to violate, not carefully disinfecting before exporting to our country, we’ll propose banning imports,” he said. More than half of the country’s imports come from India, he said.
A rebound in the Indian currency from a record low against the dollar in December has increased export prices, making supplies from Argentina and Ukraine cheaper, said Dongre.
Futures on the National Commodity & Derivatives Exchange Ltd. in Mumbai rose 15 percent since Oct. 1, beating the 11 percent gain in Chicago. The rupee, which fell to a record 54.305 to the dollar on Dec. 15, rallied 7.9 percent this year.
“The rupee was appreciating in a big way so we were becoming uncompetitive,” said Dongre. “Buyers prefer Argentine corn to Indian corn, unless and until there is a huge disparity in price. Ukraine is also feeding the market.”
Corn for May delivery gained 0.3 percent to $6.59 a bushel in Chicago by 8:42 p.m. in Singapore, while the contract for March delivery was little changed at 1,153 rupees ($24) per 100 kilograms in Mumbai today.
World corn production will total a record 863.8 million tons in 2011-2012, the International Grains Council said Feb. 23. The U.S. harvest may jump 15 percent to an all-time high 14.27 billion bushels as surging profits spur farmers to plant the most acres since World War II, the government said Feb. 24.
Ukraine’s exports may jump 20 percent to 15 million tons in 2012-2013 because of a bumper harvest, Andrew Druzyaka, adviser at the State Food & Grain Corp. of Ukraine, said Feb. 23.
India probably shipped 1.1 million tons to 1.2 million of corn since Oct. 1, said Dongre. The country may produce 21.6 million tons in 2011-2012, compared with 21.7 million tons a year earlier, according to the farm ministry.
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