Top international provide facilitates a drop in global corn costs
16 August 2024
2 minute learn
Because the July WASDE record, export bids for all main exporters have greater, in keeping with a contemporary USDA FAS international grain markets record. US bids skilled the least exchange, up simply $1/ton to $182, and are lately probably the most value aggressive on expectancies of ample provides. For the week finishing August 4, NASS estimates 67% of the corn crop to be in good-to-excellent situation, in comparison to 68% every week prior and 57% a 12 months in the past.
Ukrainian bids had been up $19/ton to $205. Scorching, dry climate in Ukraine could also be influencing provide expectancies for the impending crop.
Brazilian bids had been up $5/ton to $192 and Argentine bids had been up $4/ton to $184. Farmer gross sales and exports had been slow in each nations.
A surge in home call for for corn in India has sharply curtailed exports and ended in file imports for TY 2023/24 (Oct-Sep). Using elements for this upward thrust in call for come with govt ethanol coverage and a rising poultry marketplace. Traditionally, India has been a internet exporter that provides important volumes of corn to South and Southeast Asia. For the primary time since 1999/00, India will import as a lot corn because it exports.
India not too long ago revised its 2018 Nationwide Coverage on Biofuels to incorporate corn as a feedstock, providing value incentives for corn-based ethanol2. Sugar, India’s number one feedstock for ethanol, has confronted govt restrictions in utilization for ethanol following more than one years of low manufacturing, additional incentivising corn feedstock.
Ethanol producers’ shift to corn as a substitute coincides with a ten% build up in feed call for from India’s rising poultry sector. For the primary time since 2019/20, India has imported international corn from Ukraine and Burma, the place non-GE corn cultivation meet India’s GE import restrictions. Moreover, in June, India introduced corn imports of 500,000 heaps underneath a Tariff Charge Quota (TRQ) at a fifteen % accountability to meet this sharp upward thrust in demand3.
Top international provides have facilitated a drop in global corn costs in 2023/24. This has dampened India corn exports as sturdy home costs have incentivised buyers to stay provides in-country.
India has been a key exporter to Vietnam, Nepal, and Bangladesh, exporting 2.8 million heaps of corn in 2022/23, just about 1 / 4 of the nations’ blended general corn imports. On the other hand, exports from India to those nations declined 86 % within the first 8 months of 2023/24 12 months over 12 months. In line with this drop- off, nations shifted to different exporters or relied additional on home provides.