India may import around 1 mil mt of corn from Myanmar to meet local deficit

India is likely to import around 1 million mt of non-genetically modified corn from Myanmar into different southern ports of Tuticorin, Chennai, and Visakhapatnam to ease tightness in the domestic markets amid rising demand from the ethanol industry, trade participants said.

The Indian government rolled out plans in February under which two government agencies -- National Agricultural Cooperative Marketing Federation of India and the National Co-operative Consumers' Federation of India -- will sign deals with ethanol distillers to supply corn at the support price to reduce dependency on sugar. However, the move led to a surge in local corn prices, with poultry farmers struggling to procure feed costs.

"India is importing a lot of Myanmar corn recently due to monsoon rains that damaged the current crop harvest, while the ethanol policy has also driven local prices up," a Singapore-based trader said.

Indian traders are expected to purchase corn between $275-$287/mt CFR from Myanmar, according to trade sources. Corn prices in key markets of India were around Rupees 24,600/mt ($292.59/mt) on Oct. 22, up nearly 12% on the year, they added.

According to trade sources, Myanmar is a key choice for non-GMO corn imports for India as it offers duty-free purchases. Myanmar is accorded the status of the least developed country as opposed to Ukraine where Indian exporters have to purchase corn at 15% import duty under a tariff rate quota of 500,000 mt for the financial year 2023-24 (April-March). Usually, India levies a 60% import duty on corn.

Apart from the rise in demand from the ethanol industry, there are also quality concerns over the crop in south India due to excessive showers during the June to September monsoon season in 2024.

India usually produces around 36 million-38 million mt of corn annually, with nearly 23 million mt produced during the kharif season. Kharif, also known as monsoon crops, are sown at the beginning of the rainy season, usually from July to October.

Traditionally, India's poultry and starch industries have been the largest consumers of the country's corn production, using 60%-70% of India's total corn production, sources said.

However, with ethanol distilleries purchasing corn, the demand increased in 2024. According to trade sources, the increased demand from the ethanol industry has created a shortage of 5 million mt.

"India [is] definitely going to be importing more corn due to ethanol policy, but not sure about quantity. Think, it’s about 1 [million]-3 million mt and was not surprised that 1 million mt was booked recently," another trader based in India said.

India's corn imports during the financial year 2023-24 (April-March) surged sharply due to the rise in local demand. During April-August, India imported 644,334 mt of corn, compared with total purchases of 126,624 mt in the financial year 2023-24, according to the commerce ministry data.