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India imports 27,000 tonnes non-GM corn from Ukraine at $205 per tonne: trade sources

By Mayank Bhardwaj

NEW DELHI (Reuters) - India has imported an extra 27,000 tonnes of non-genetically modified (GM) corn from Ukraine at $205 a tonne, including cost, insurance and freight, three trade sources said on Thursday, to offset a shortage triggered by pest infestations and dry weather.

Earlier this year, the country imported 57,000 tonnes of corn, free of GM organisms, from Ukraine, in what was the country’s first overseas purchase since 2016. The latest purchase takes this year's total imports to 84,000 tonnes, the sources said.

A cargo of 27,000 tonnes of non-GM corn from Ukraine has just arrived at the Kandla port in the western state of Gujarat, three trade sources directly involved in the deal told Reuters. They didn't wish to be named in line with their companies' policy.

India, which used to be a major exporter of corn to southeast Asia until a few years ago, has turned into an importer, thanks to falling output and rising demand from the country's poultry producers and corn starch manufacturers.

The switch in India’s position has brought cheer to rival corn suppliers like Brazil, Argentina and the United States which have now replaced New Delhi in the southeast Asian market.

Stung by a sharp drop in output, India in 2016 asked one of the three state-run traders, PEC Ltd, to import duty-free corn - the country’s first such overseas purchase in 16 years. But PEC could import only 181,000 tonnes.

India, which doesn't allow cultivation of any GM food crop, has rules that are supposed to ensure that imports contain no trace of GMOs.

But an explosion in the use of GM crops worldwide means that purity has become harder to attain, underlining the vulnerabilities faced by countries trying to stay GM free.


JUST ONE SHIPMENT

Even one shipment containing a few grains of GM corn could seep into Indian agriculture by cross pollinating with Indian varieties, making domestic farmers vulnerable for illegally growing GM crops, said an Indian government official who's involved in framing trade rules. He asked not to be named as he's not allowed to speak to the media.

Concerns over contamination have delayed imports of non-GM corn by state-run trader MMTC, two government sources said. In April, the government allowed MMTC to import up to 100,000 tonnes of corn at a reduced duty of 15 percent.

India, the world's seventh-biggest corn producer, otherwise imposes a 60 percent import tax on the grain.

Indian corn prices have surged more than 20 percent since the second half of 2018, hitting the financial health of local poultry producers and corn starch manufacturers.

Poultry producers and starch manufacturers have petitioned the government to allow imports of at least half a million tonnes of corn at a reduced tax rate.

In February, two traders in Singapore said India was expected to import up to 1 million tonnes of corn this year.

An infestation of the fall armyworm, which devastated African crops in 2017, and dry weather in some areas, have cut India's corn output.

Indian farmers grow corn twice a year. Traders and analysts expect that India's corn output from the summer season of the 2018/19 crop year could drop to 16 million tonnes against 20.24 million tonnes harvested in the summer season of 2017/18.


(Reporting by Mayank Bhardwaj; Editing by Martin Howell)