A seasonal report on Maize - Karvy Commodities Broking

According to USDA, production & consumption for year 2012-13 is expected to increase by 9% and 6%respectively, hence adequate supplies will be there for exports. Therefore, lower imports and higherexports are projected for 2012-13. However, 6% of crop got damaged due to La Nina.Major Importers & Exporters of Maize in WorldThe largest maize importer in World is Japan followed Mexico, South Korea followed by EU-27, China.European Union can import from United States since enough supplies are projected.United States is the largest maize exporter in world followed by Argentina, Ukraine and Brazil. Thedestination for exports are slightly different compared to the previous years. India and Ukraine has acompetitive advantage in maize exports to China due to lower prices as compared to US and good supplies.As per the 2011-12 estimates, the top exporters of Maize in the world are United States (South America),Argentina, Ukraine and Brazil. The major countries that import maize are Japan, Mexico, South Korea andChina but by the end of the year 2014, China is expected to become the top importer of maize in the worlddue to the continuously increasing demand from the feed industry which is more than 61% of the totaldemand.Major Maize ImportersMajor Maize ExportersOther41%China Egypt5% 5% EU-276%Iran4%Japan16%Others11%Argentina15%Brazil13%EU-273%Taiwan5%Mexico10%Korea,South8%UnitedStates41%Ukraine14%India3%Source: USDA & KCTL ResearchMaize Balance Sheet- CHINATotal Supply (Million Tons)Total Demand (Million Tons)Years BeginningstocksImports Production Exports Consumption Endingstocks2011-12 49.415 5 192.780 0.2 188.000 58.9952012-13* 58.995 7 195.000 0.2 201.000 59.795Source: USDA estimates (* projected)As per USDA estimates, production is expected to increase by 1% and consumption by 7%. This widemismatch between the demand and supply will arise due to the ever increasing population, increasing percapita meat consumption and hence feed demand apart from industrial demand for starch, corn syrup andother processed products. Production is stagnant; productivity is not increasing compared to the area. Eventhough the beginning stocks are more by 19%, it is expected that the demand will not match with thesupply due to increasing consumption. In the 2010 crop year, around 70 tons of every 100 tons of cornused in China were used for feed. China’s Corn production in 2010 decreased by 13% to a four year lowdue to drought and hence China became an importer of corn from 2010 from being an exporter. Cornimports are taking place apart from soybean imports. For the first time, China has started importing cornfrom Ukraine due to lower cost than US and it is non genetically modified crop. So, Chinese firms are able toprocure the raw materials in abundance at cheaper rates to fulfil all their demands. While, imports areexpected to increase by 40% Y/Y. Previously, it was dependent on United States entirely for its supply. But