Author: Rajendra Jadhav and Mayank Bhardwaj
MUMBAI/NEW DELHI, Feb 11 (Reuters) – Indian corn and soybean prices fell on Wednesday after New Delhi agreed to duty-free imports of U.S. soybean oil and protein-rich animal feed under a new trade deal with Washington, sparking concerns among farmers about cheaper supplies.
Farm unions and opposition parties, concerned about cheap U.S. supplies, called for nationwide protests on Thursday.
A joint statement from India and the United States last week said New Delhi had agreed to import duty-free soybean oil and distillers dried grains solubles (DDGS), a corn ethanol by-product used as cattle feed.
Soybean and corn prices have fallen 10% and 4% respectively since the temporary framework was announced last week, reigniting anger among millions of India’s small farmers whose protests in 2020-21 forced New Delhi to repeal laws aimed at deregulating the market.
Harish Galipelli, director of Hyderabad-based trading house ILA Commodities Pvt Ltd, said that while allowing imports of US DDGS is putting pressure on prices, the short-term impact is likely to be limited.
With record production and declining demand from ethanol producers, corn prices are around 1,820 rupees ($20.06) per 100 kilograms, well below the support or guaranteed price of 2,400 rupees set by the government.
Likewise, demand from domestic feed manufacturers remains weak, with concerns that cheaper DDGS imports could exacerbate the current supply glut, traders said.
According to estimates from the Ministry of Agriculture, India’s summer corn production increased by 14% to a record 28.3 million tons.
Prominent farm leader Rakesh Tikait said the government did not hold any discussions with farmers before agreeing to the deal.
“We are kept in the dark and the trade deal is a heavy blow to the agriculture sector, which is the backbone of India,” he said.
Warning the government not to go ahead with the deal, Tikait said: “There will be nationwide protests on February 12, after which we will intensify our agitation.”
(1 USD = 90.72 rupees)
(Reporting by Rajendra Jadhav and Mayank Bhardwaj; Editing by Alexander Smith)
