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India dithers on corn export ban as supply dwindles

Published on 28 November, 2006, Last updated at 23:15 GMT


Disagreement among Indian government officials is delaying a ban on corn exports, the trade said on Tuesday, but added that such a move was inevitable as demand in the domestic market would exceed supplies.

Corn production is likely to be 12.75 million tonnes in the crop year between October 2006 and September 2007, official say. Demand during this period is expected to be 14 million tonnes.

India earlier this month struck its first corn export deals in many years, taking advantage of shrinking global supplies, selling about 150,000 tonnes of corn to Indonesia, Malaysia and Sri Lanka.

The spurt in exports have boosted domestic corn prices and cut into supplies, especially for the poultry sector, a major consumer, traders say.

A top industry official said the commerce ministry was open to the idea of imposing a ban, but the agriculture ministry was not convinced the measure was needed. He said poultry firms had requested a ban and a lowering of duties on corn imports.

"We are trying to convince the agriculture ministry to take a decision," the official said.

India currently imposes a 15 percent duty on corn imports, making purchases from overseas expensive.

Manish Kumar Gupta, managing director of Gujarat Ambuja Exports Ltd., said a ban could be in place within two weeks.

"One round of corn exports has been done. If there is no ban, it looks like there will be a second round," he said."


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