Corn traders expect import duty to be slashed to 10%

Published on : March 08, 2019 Topic : Companies
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New Delhi: The government is likely to reduce import duty on corn to 10-15 per cent from the current 60 per cent due to lower domestic production this year, industry insiders told ET. They also expect the commerce ministry to allow state-owned Metals and Minerals Trading Corporation of India (MMTCNSE 0.71 %) to announce e-tender for half a million tonnes of corn in a week’s time.

State Trading Corporation of India too is trying to be a canalising agency for corn imports, trade sources said.

Corn, or maize, is the third largest cereal crop in the country after rice and wheat. As per the second advance estimates of kharif production released by the government in February, production of maize is expected to be 27.80 million tonnes in 2018-19, down from the previous year’s 28.72 million tonnes.

The industry expects the production figure to be even lower because of deficit rainfall and worm attack. Hence the move to increase imports and cut customs duty. “MMTC has already got data on the domestic requirement and it has asked for zero duty import of over half a million tonne of corn,” a trader from Delhi told ET. “It will take another 7-10 days for the commerce ministry to clear the proposal.”

The trader who requested anonymity said the trade expects the ministry to reduce import duty on corn to 10 per cent to 15 per cent, because allowing zero duty imports will impact India farmers. The rabi harvesting will soon begin in Bihar, Uttar Pradesh and Punjab, followed by coastal region of Andhra Pradesh and Karnataka.

Traders and brokers procuring corn for animal feed and starch companies said that with the government allowing import of only non-GM corn, the only option was to source it from Ukraine.

Due to this, they expect corn prices for the Indian market at $170/ tonne FOB (free on board), up $10 tonne from its current prices.

“With all these transparent efforts of collating corn import requirement for an import tender, we are going to drive Ukraine prices by minimum 5-7 per cent,” said PS Nathan of Apoorva Agri, a Chennai-based commodity trader. “Since we need GMO-free corn we have no second source beyond Ukraine.” At present corn attracts import duty of 60 per cent and countervailing duty of 4 per cent, he said.

Corn prices have corrected in the domestic market since January with the news of likely imports.

In the spot market, prices have fallen almost 7 per cent to Rs 1,680 a quintal from Rs 1,800 in January, Anuj Gupta, deputy vice-president of commodity research at Angel Commodity, said.

 

Source: The Economic Times
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