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Maize exports on the rise

Updated July 22, 2013

A LARGE maize harvest in the last marketing year not only helped local food companies raise production of corn flour, corn flakes and similar products, but also increased export earnings.

In 2012-13, maize production totalled 4.63 million tonnes, seven per cent higher than a year earlier. The crop was mostly consumed at household levels or for manufacturing of value-added products by food processing companies. But a part of it, around 300,000 tonnes or so, was also exported to a number of countries including Indonesia, Malaysia, Viet Nam, Singapore, Sri Lanka, China and Hong Kong, industry sources told Dawn.

So far this year the total foreign exchange earnings from these countries were no less than $120 million, according to officials of Pakistan Bureau of Statistics. “Overall estimated forex earnings should be around $150 million if exports to Bangladesh, India, Oman, Qatar, UAE, Japan, South Korea, Belgium, Germany, Tanzania and Yemen are also taken into account,” says an official. Final statistics are still being compiled and will be out by the end of the year.

Industry sources say that exports of maize restarted in FY08 and since then about a million tonnes of grains have been shipped out to 20-something countries. In FY12 about 200,000 tonnes of grain was exported for a little less than $100 million.

According to latest crop assessment reports of Suparco and provincial agriculture departments, maize production in 2013-14 also holds promise for higher growth. Spring maize, the harvesting of which is nearly over now, is expected to produce about 2.6 million tonnes.

And if the autumn maize (sowing of which will start in late July and in early August) produces 2.4 million tones, the total crop size will be five million tonnes.

Growers say that bumper harvest is expected in Okara, Pakpattan, Sahiwal, Chiniot, Faisalabad, Kasur, Jehlum and Toba Tek Singh in Punjab and in Peshawar, Mardan, Kohat, Malakand and Hazara in KPK.

“Accelerating export volumes, therefore, may not be an issue. But sustaining current export markets and finding new ones may be,” says a Karachi-based grains trader who exports maize to a number of countries. He says that Indonesia, Malaysia, Viet Nam, Singapore, Sri Lanka, China and Hong Kong are likely to remain the main markets due to growing consumption of corn and corn-based products there. But it is difficult to say if other Middle Eastern, South Asian, European and African markets can be sustained or explored further.

“Bangladesh is now exporting corn to India and India’s corn import needs are down this year. Countries like UAE, Oman and Qatar are buying Chinese or European corn and exporting corn to Europe and Africa is becoming costlier for us due to high cost of freight,” the trader added.

Some exporters also point out that Indonesia has stepped up its corn purchases from Latin American countries and our corn exports to Indonesian buyers need to become more competitive in rates and in quality.

They also say that in East Asian and Middle Eastern markets the trend to use boiled, dried and sweetened corn is growing rapidly. So, in order to sustain those markets Pakistan can either become more competitive in supply of its high quality golden maize or start selling more sweetened canned corn.

Officials of food companies like Rafhan Maize and Mitchells say that whereas loose maize exports have grown only recently, they have long been exporting maize products to a number of countries adding that in 2012-13 their export volumes have increased. They say that exports of Pakistan’s canned sweet corn is growing in particular and competing well with similar products of other nations in the Middle Eastern market.

Commodity traders involved in maize exports say that currently maize export prices range between $250 and $300 per tonne for ordinary quality and $300-$450 per tonne for premium quality thick golden corn. They say that many of them accept buying orders of even one tonne but large exporters normally have a minimum supply limit of 25-100 tonnes. One exporter told Dawn he had exported a few thousand tonnes of corn to both Indonesia and Malaysia for an average f.o.b. price of $250 per tonne.

According to a latest USDA report, corn production in 2013-14 is expected to increase 12 per cent to 959.84 million tonnes and exports are also likely to rise 16 per cent to 103.85 million tonnes. This projected increase in global output and exports means Pakistani exporters will have to work harder for achieving a sustainable growth rate in export earnings.

Exporters say one way of ensuring it is to focus on exports of traditional premium quality maize to European countries that have lately grown averse to imports of genetically modified corn supplies from the US. The other way is to move faster from exports of maize grains to value-added products. —Mohiuddin Aazim