Govt mulls allowing import of 500,000 tn duty-free maize this yr

• 22 Jan, 2019
• India

Monday, Jan 21

–Source: Govt may allow actual users to import duty-free maize FY19
–Govt may allow import of 500,000 tn duty-free maize this yr
–Duty-free maize import may be routed via state agencies

By Stuti Chawla

NEW DELHI – After a gap of more than two years, India may be back in the market for import of maize to ease the supply crunch for starch and poultry industries.

The government is considering a proposal to allow import of up to 500,000 tn duty-free maize this year under the tariff rate quota, a senior government official said.

The imports would be allowed only for actual users and canalized through state trading companies, the official said.

Maize currently attracts 60% import duty, but under the under the tariff rate quota, imports are allowed duty-free for a specified quantity.

India had last imported maize in 2015-16 (Apr-Mar), when it bought 240,000 tn of the coarse grain under the tariff rate quota.

Further imports under the quota were not allowed, as there was a court case on permitting import of food grade maize used for popcorn under the tariff quota at zero duty.

Though the case is sub-judice, the government may still permit import of feed grade maize, and take legal opinion to see whether it needs a separate Harmonised System code for this grade.

Harmonised System codes are globally standardised numbers that classify traded products for easy identification.

Currently all grades of maize are classified under one HS code.

The starch and poultry industries had been lobbying with the government to permit import of duty-free maize as prices have shot up due to tight supplies.

In Bangalore, maize was today offered at a record high price of 2,100 rupees per 100 kg, about 50% higher on year.

"Quality maize is not available even at such high prices," an official with a starch manufacturing company in Mumbai said.

Though the government has pegged kharif maize output this year at a record high of 21.47 mln tn, up over 6% on year, industry estimates peg production much lower at 13-14 mln tn.

"There is clearly a deficit in the market this year, which needs to be bridged by imports," the official said.

Non-genetically modified maize from Ukraine could be available at Kandla port at about $215 a tn, cost and freight, which would translate to a mill-gate price of about 1,850 rupees per 100 kg.

Not only would imports be cheaper, they may also spur stockists to start liquidating inventories, which could help improve supplies till arrivals from the rabi crop start in April, the official with the starch company said.  End
US$1 = 71.38 rupees

Edited by Vandana Hingorani

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This copy was first published on the Cogencis WorkStation

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