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Corn (Maize), after wheat and rice is the most important cereal
grain in the world. It provides nutrition to both humans (33.3%) and animals
(66.6 %). Corn is basiclly used as raw material for the production of
starch, oil and protein, alcoholic beverages, food sweeteners and more
nowadays to produce ethanol, fuel. It is also consumed directly as food.
But its biggest use is as feed for livestock. United States and
China are the two largest producer of corn in the world. United States
is also the largest corn exporter while Japan is the largest importer.
World Corn Production
World corn production in the year 2003 was at 614.3 million tons
while in year 2004 total world corn production was estimated to be 642.6
million tons. Global production of Corn-maize for 2007-08 stood at 772
Million Tons and the consumption requirements were 777.4 million tones.
In recent past, growth of consumption requirement is faster than the production
growth due to industrial use in production of bio- fuel. Corn production
and consumption is dominated by United
States. Corn is largest U.S. crop, in terms of both
volume and value. The states of Iowa, Illinois, Nebraska and Minnesota
account for more than 50 percent of U.S. corn production with Iowa being
the largest producer. Other major corn-producing states in U.S. include
Indiana, Wisconsin, South Dakota, Michigan, Missouri, Kansas, Ohio and
Kentucky. The United States grew 39 percent of the world's corn in during
fiscal year 2009, producing 307.4 million metric tons (12.1 billion bushels).
The other major corn producers include China, Brazil, Argentina, European
Union (France, Italy, Hungary, Romania, Poland), Mexico, India, Canada,
Indonesia, Ukraine, South Africa and South East Asia.
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Major Corn Producers, Exporters & Importers
United States is the world's top exporter of corn On average, about
20 percent of U.S. corn is exported. During the year 2008-09, United
States exported 47.5 million metric tons (1.9 billion bushels) - accounting
for 59 percent of total world corn exports of 84 million tonnes. During
the same period, other major corn exporters included Argentina
(8.5 million metric tons) and Brazil (7.2 million metric tons),
European Union, Ukraine, India, South Africa, Serbia and Paraguay.
USA & China are the major consumers of corn. Though China is a big
grower of the crop, it sometimes has to import it to overcome its demand-supply
gap. There has been continuous increase in the consumption demand of corn
due to increase in the demand from meat and starch sector. There is also
growing requirement of maize from poultry sector, which uses corn as feed.
Japan is the largest buyer of corn in world market roughly importing
20% of the world trade. United States satisfies nearly all of Japan's
demand. Mexico, South Korea, Taiwan, EU-27, Egypt, Colombia,
Iran, Malaysia, Canada, Vietnam, Israel, Venezuela, Saudi Arabia, Syria
and few African nations are other major importers of the corn in
global market. Major quantity of corn is exported in bulk.
In world market, U.S. corn faces competition from different origins in
different markets. In most market it faces stiff competition for South
American producers (Argentina and Brazil), in Asian market India is also
the main competitor while in African region, U.S. corn faces challenge
from South Africa.
Indian Corn Scenario
India is the top exporter of Corn from Asian region supplying mainly
to South East Asia and its neighbouring countries. Generally Indian corn
production was in the region of 14-15 million tonnes but in last few years
it has shown godo increased and for 2010-11, it crossed 20 million tonnes.
Maize in India is grown in both kharif (80%) and rabi (20%) seasons. The
major corn producing states in India are Karnataka, Andhra Pradesh, Bihar,
Maharashtra, Madhya Pradesh, Gujarat and Uttar Pradesh. In kharif, it
is sown in June-July till mid-August and harvested from mid-September.
The arrivals extend from late September to February. In rabi, maize is
grown in Bihar and coastal region of Andhra Pradesh. The arrivals start
from late March and extend upto June.
Maize production and consumption has been rising consistently in India.
The feed uses of maize are projected to increase by 10% annually. Increased
production of maize has helped India to become one of the top supplier
to South East Asian region as also the country enjoys the freight advantage
for that region over its American competitors. In West Asian market, Ukraine
is the major competitor for India. In 2007-08, India exported record around
5 million tonnes of corn to world market. For 2010-11, the country is
estimated to export more than 3 million tons.
India has a pretty strong platform for hedging of the corn commodity.
Ncdex provides contracts for Maize for Feed / Industrial use which is
used by the exporters and traders for hedging purpose.
Indian Corn Outlook 2010-11 (source - Usda)
Indian Corn production in 2010-11 is estimated at a record 21.0 million
metric tons against 16.7 mmt in 2009-10 and exports are expected to be
2.5 million tons against 1.5 million tons. The Indian government’s
provisional kharif planting data shows a significant increase in area
under corn. Weather has been generally favorable for coarse grains in
most of the growing areas, and there have not been reports of crop damage
due to flooding, pests and diseases. The planting conditions are favorable
for the rabi season coarse grains (corn and sorghum) due to sufficient
late monsoon (September) and post monsoon (October-November) rains. The
area estimates for corn is estimated at 8.5 million hectares against 8
million hectares in previous year. The yields too are estimated higher
at 2.47 metric tons per hectare against 2.09 tons. Ending stocks are estimated
up at 871 thousand tonnes against 671 thousand tonnes in previous year.
Consumption for corn are estimated higher at 17.8 million tonnes in 2010-11
up from 15.4 million tons in 2009-10 on prospects for improved domestic
supplies. Continued growth in the poultry and starch industry will support
higher consumption of corn. Higher Corn export estimate for 2010-11 is
due to improved domestic supplies and relatively strong global corn prices
vis-a-vis Indian corn. The higher prices of U.S., Brazil and Argentina
as well their longer transport time gives Indian corn an edge in the South
East Asian region.
Vietnam Corn Scenario
Corn is Vietnam’s second largest annual crop, after rice, in terms
of production area. However, total corn production area is only one third
that of rice. Because it has a lower market price and yield compared to
rice, legumes, soybeans, and tobacco, corn is often not seen as an attractive
cash crop for farmers. In Vietnam, corn is the main crop used to supply
the quickly growing feed industry. As such, corn producers are under pressure
to quickly increase their productivity, in order to satisfy the animal
feed industry, which is enjoying an 8-10 percent annual growth rate. Significantly
improving average yields by using high-yielding varieties seems the most
likely way to achieve the government’s objectives of increasing corn
production to supply the feed sector.
In Vietnam, corn is used as the main source of protein and energy for
the animal feed industry, both the commercial and home-made sectors. Within
this industry, corn is used mainly in hog and poultry feed. In CY 2009,
the Vietnamese feed industry experienced a growth rate of 14 percent for
poultry and 5 percent for hogs over their CY 2008 levels. While the domestic
agricultural industry is trying to increase corn production to satisfy
the fast growing feed industry, there is strong competition from imported
corn, whose pricing is often more competitive. Price is one of the most
important factors influencing feed manufacturers to switch from using
locally produced to imported corn. In CY 2009, local corn prices increased
due to the short supply resulting from the smaller corn production area.
Local prices were very high, causing demand for imported corn to increase
substantially. As a result, import volumes increased to 1.49 million tons,
which represents a 244 percent jump over the CY 2008 import volume.
Constraints to the future growth of corn imports into Vietnam include
insufficient storage and grain handling facilities. Without adequate corn
storage, farmers have to sell their product quickly after the harvest,
which will continue to make the local corn price prone to seasonal fluctuations.
DDGS has also been used by the Vietnamese feed industry to minimize manufacturing
costs, and is therefore a strong competitor to locally grown corn. Vietnam’s
corn imports increased tremendously from 601,000 tons in CY 2008 to 1.49
million tons in CY 2009. Competitive international corn prices helped
set a record for corn imports and continue to present a real challenge
to expand Vietnam’s domestic corn production. India, Thailand, Brazil,
and Argentina are the top four corn exporters to Vietnam, and they account
for more than 87 percent of Vietnam’s total corn import volume. Vietnam’s
import tariff on corn is zero percent for countries with Most Favored
Nation status.
Malaysia Corn Import Scenario
Malaysia is the largest importer of Corn in South East Asian region as
the production is very limited at around 100000 tonnes. Domestic corn
production is unlikely to expand significantly in the foreseeable future
so the country's import growth is likely to remain healthy.
Import Market Shares of Top Suppliers to Malaysia based on tonnes landed
(2007 imports) (source: AAFC)
Total Corn Import - 2.7 million tonnes. Market Share: Argentina: 50%,
China: 18%, India: 10%, U.S.: 9%, Thailand: 8%
Malaysian 2010-11 Corn Outlook as per Usda: Usda's FAS Attache's report
expects Malaysian corn imports to grow at healthy rate in 2010-11 and
2011-12 due to the increase in consumption and insignificant domestic
production which is unliklely to expand in any major way in near future.
The outlook for 2010/11 looks bright for corn imports in Malaysia. With
the positive outlook, Post expects domestic feed consumption of corn to
increase by 5 percent to 3.0 MMT in 2010/11 and by another 6 percent in
2011/12. Argentina was the biggest supplier in the Malaysian corn market
in 2009/10, followed by Brazil and India while United States had a share
of less than one percent. With an expected decrease in Argentine corn
exports, Brazil is likely to dominate the market in 2010/11. With more
Indian corn available, Malaysia is buying more Indian corn in 2010-11.
Malaysia imported 2.88 million metric tons of corn in 2009-10. Major Corn
Suppliers to Malaysia for 2009-10 (in thousand tons): Argentina - 1205,
Brazil - 773, India - 426, Thailand - 263.
The Malaysian government has no definite plans to develop a viable domestic
field corn industry. Domestic corn production is unlikely to expand significantly
in the foreseeable future. The GOM plans to seek land in neighboring Indonesia
to cultivate corn for the Malaysian feed market but has not shown any
successful results which means the Malaysia's any growing demand will
have to be met with corn imports.
Indonesian Corn Outlook 2010-11
(source: Usda Attache Report)
Indonesian corn imports are estimated to nearly double to 2.5 MMT in
2010-11 compared to the previous MY of 1.337 MMT. Indonesia’s production
of corn in MY 2010/11 is estimated to further decline by 2.17 percent
to 6.75 MMT, over the previous MY of 6.9 MMT. This decrease is mainly
due to a decrease in planted and harvested areas. The decline in production
- combined with higher demand from feed mills and a major, new corn wet
mill - will increase corn imports in MY 2010/11. The Indonesian Feed Millers
Association estimated that CY 2011 feed consumption will reach approximately
10.3 MMT. Poultry industry consumes approximately 83 percent of the total
feed consumed. The association reported that corn normally accounts for
50 percent of feed formulations.
Corn consumption by feed industry estimated to increase to 4.6 MMT in
MY 2010-11 compared to the previous MY 2009/10 of 4.5 MMT while a total
of 4.7 MMT of corn will go for human consumption. Corn contributes to
80 percent source of energy in feed. Lower supply and quality of corn
from domestic market will drive feed millers to source the corn from import.
In MY 2009/10, Argentina held the largest market share of 61 percent,
followed by Brazil (12 percent), India (8 percent), South Africa (7 percent),
and the United States (6 percent). In March 2011, the price of local corn
was reportedly at Rp. 3,700/kg ($421/MT) from Rp. 2,950/kg ($335/MT) in
December 2010, while the price of imported corn stood at Rp. 3,300/kg
($375/MT) compared to Rp. 2,650/kg ($300/MT) in December 2010.
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