Production:

Because nearly 85 percent of the coarse grain area is unirrigated, production critically depends on the performance of the southwest monsoon rains. Assuming a normal monsoon this summer, MY 2015/16 coarse grain production is forecast up 2.7 MMT to 41.8 MMT. More than 75 percent of coarse grains are cultivated during the kharif season, while some corn and sorghum, and barley crops are produced during the rabi season.

MY 2014/15 total coarse grain production is estimated lower at 39.1 MMT (22.5 MMT of corn, 10.0 MMT of millet, 4.8 MMT of sorghum, and 1.8 MMT of barley), a 10 percent decline over last year's record harvest. Based on the latest official estimates, MY 2013/14 acreage and production in the PSDs have been marginally revised.

The delayed and deficient 2014 monsoon caused farmers to shift to other crops such as rice, cotton, and some oilseeds (as reflected from official planting estimates). Deficient monsoon rains also affected kharif coarse grain yields, particularly in Maharashtra, Rajasthan, Gujarat, and Karnataka. Deficient soil moisture conditions and weak market prices have discouraged planting of rabi season corn, sorghum, and barley.

In the last few years, corn production in India has shown a steady upward trend on growing demand and higher productivity. There has been a growing demand from the rapidly expanding local poultry, starch, and commercial animal feed industries and steady export demand from neighboring markets. Increasing adoption of improved hybrids, particularly single cross hybrids, has encouraged farmers to bring more area under corn cultivation, as area under corn went up from 6.6 million hectares in early 2000's to a record 9.4 million hectares in MY 2013/14. Market sources report planting of hybrid corn at about 65 percent, which is expected to grow as farmers continue to replace the traditional cultivars with higher-yielding hybrid varieties.

Sorghum and millet production has slowed down in recent years due to an increasing shift in area to corn, cotton, soybean and other commercial crops. In the absence of any significant major productivity enhancing technological (varietal or agronomic) breakthrough, a lack of industrial sector demand and growing consumer preference for wheat have influenced farmer planting decisions. Millet and sorghum production (mostly unirrigated) also fluctuates year to year depending on the performance of the monsoon.

Production of barley, a relatively small winter crop in north India, has been relatively steady at around 1.8 MMT on demand from the malting and brewing industry. Traditionally barley production in India consists of feed quality, six-row varieties, unsuitable for malting and mostly used for food and animal feed purposes. In the last few years, a few new, high quality malting grade barley varieties have been developed through public-private breeding programs; these seeds are steadily replacing older varieties. Trade sources report that some malting and brewing companies have contract farms that produce malting grade barley grain in Rajasthan, Punjab, and Haryana.

Consumption:

In MY 2015/16, coarse grain consumption is forecast up 2.2 MMT to 39.3 MMT on continued steady demand from animal feed and industrial users. Since early 2014, relatively weak domestic prices and growing consumer and export demand have fueled corn and other coarse grain purchases by the poultry and animal feed sector and other industrial users (e.g., starch and ethanol).

Traditionally, coarse cereals were the staple diet of Indians, especially for rural and lower income households. Because of the Green Revolution in the late 1960's, and the government's focus on improving food security, coarse grains have been increasingly replaced by rice and wheat. Recent economic growth and changing consumer preferences have continued to fuel a steady shift away from coarse grains.

Nevertheless, coarse grains are still an important cereal supplement in the staple diet for a large section of subsistence farmers and the rural poor. Demand for coarse grains is also likely to improve among "health conscious" Indians consumers.

In the recent years, corn is increasingly used for feed and industrial use, particularly poultry feed and starch. Since MY 2013/14, the poultry industry has been growing very strong due to higher consumer demand for animal proteins. The starch industry, which largely caters to textile production, is also likely to continue to grow on domestic and export demand. Consequently, MY 2015/16 starch industrial corn consumption is estimated to grow by about five percent to 1.9 MMT. Some corn, estimated at about 1.25 MM, is also used for ethanol production in the potable liquor industry for producing blended whisky and other industrial products. Other corn is used to produce traditional foods, snacks, and savories.

Food use accounts for a major share of sorghum, millet, and barley consumption. However, poor quality grains (largely rain damaged) are fed to cattle. Some new barley varieties are used for brewing (around 600,000 metric tons). Indian sorghum is not traditionally fed to chickens due to its high tannins (poor taste), but is reportedly increasingly incorporated in the production of spirits, industrial alcohol, and starch.

India's domestic ethanol program uses molasses (a sugar industry byproduct) as feed stock, and does not utilize cereal grains for producing ethanol for fuel. Consequently, the domestic ethanol program does not affect the domestic and export market demand for cereal grains and its byproducts.

Prices

Despite lower domestic production, corn prices eased during the first quarter of MY 2014/15 on weak export demand, but gained since January 2015 on stronger domestic use. During the second week of February 2014, corn prices ranged from INR 11,290 ($181) to INR 14,240 ($229) per MT, marginally lower than previous-year prices during the corresponding period.

Trade:

Post forecasts MY 2015/16 at 2.0 MMT on expectations of less competitive pricing compared to other major exporters. India's ability to ship corn in small quantities (containers) is a key factor for regional buyers like Bangladesh, Nepal, Sri Lanka, and other markets like Indonesia. Occasionally, India exports small quantities of sorghum and barley, largely to neighboring countries and the Middle East.

After four consecutive years of bumper corn exports, MY 2014/15 exports are estimated to decline to 2 MMT on relatively weak export demand. Market sources report that Indian corn is currently $20 to $30 per MT more expensive than competing corn from other origins.

Market prices in major corn surplus states are already below the government's MSP; however, these prices are unlikely to decline significantly due to strong domestic demand. Market sources believe that export prospects are likely to slightly improve after the rabi corn harvest in March. Assuming continued low, more competitive international corn prices, MY 2014/15 exports are estimated at 2.0 MMT, down nearly fifty percent over last year.

Policy:

Production:

The GOI's production policy and programs for coarse grains are significantly lower on coverage and budgetary support compared to rice and wheat. The government's MSP procurement program and food distribution program through the PDS for coarse grains are very limited and less effective than those for rice and wheat. During the current season, the central government advised the states to procure corn and other grains under MSP operation, strictly for PDS distribution. Consequently, most of the procurement was limited, strictly for PDS only, unlike previous years when government coarse grain stocks were sold to poultry and animal feed users. Sources report that the government procurement of coarse grain during MY 2014/15 has been limited to the state of Madhya Pradesh, estimated to be just over 300,000 MT. In MY 2013/14, the government procured more than 1.2 MMT from Karnataka, Telangana, Maharashtra, Madhya Pradesh, and Andhra Pradesh.

Unlike wheat and rice, the government does not have any buffer stock commitments for coarse grains. The GOI does not allow the use of food grains, including coarse cereals, to produce biofuels. However, grains certified not fit for human consumption can be used to produce potable liquor and other industrial usage. Efforts to produce ethanol from other feed stocks like sweet sorghum stover and crop waste are still in an experimental stage.

India has not commercialized any genetically engineered (GE) coarse grain crops. Reportedly, some corn events are going through the regulatory approval process, this process has been very slow. Several Indian seed companies and public sector research institutions are developing various GE crops including corn and sorghum, but it may take several years before it can be commercialized. Most biotech events in other coarse grains (sorghum and millet) are still at the developmental stage, and have not been submitted for regulatory approval.

Trade:

Currently, the GOI imposes no restrictions on corn, millet, sorghum, and barley exports. Historically, India's trade policy allowed imports of most coarse grains only through the Food Corporation of India and other designated state trading agencies. On September 29, 2014, the GOI removed the restriction, which paved the way for imports by the private trade. Imports must adhere to phytosanitary conditions specified in the Plant Quarantine (Regulation of Imports into India) Order 2003. India imposes a basic import duty of 50 percent on sorghum and millet, while the import duty for barley is zero.

India allows corn imports under a tariff rate quota (TRQ) of 500,000 MT with a zero percent duty. Imports of corn outside the TRQ are subject to a 50 percent import duty. To import corn under the TRQ, the importer must obtain a Tariff Rate Quota Allocation Certificate issued by the Directorate General of Foreign Trade (DGFT). This certificate is issued in accordance with procedures developed by the EXIM Facilitation Committee. From MY 2012/13 to 2013/14, only state trading enterprises had access to the TRQ, which was not utilized during that time period. The September 29, 2014 notification may pave the way for corn imports under the TRQ in the future, but will be mostly limited to food grade corn and popcorn.

The GOI's phytosanitary requirements for weed seeds, ergot, and other SPS issues, including no approvals to date for any GE corn events, have effectively banned U.S. coarse grain exports to India. Imports of any GE product, including GE corn and food products derived from GE crops, are subject to approval by India's biotech regulatory agency, the Genetic Engineering Appraisal Committee (GEAC). To date, the GEAC has not approved any GE coarse grains or byproducts for import.

Marketing:

India currently does not import corn or other coarse grains in significant quantities. However, the growth of the poultry and starch industries may eventually create demand for imported corn in the next five to ten years, while growth in the brewing industry may fuel demand for malting grade barley in near future. India is likely to continue to import small quantities of food grade corn (e.g., sweet corn etc.,) and popcorn for the food processing industry due to growing consumer demand and low domestic supplies.

India: Corn, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons, Yield in MT/Hectare)

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Nov 2013

Nov 2014

Nov 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

9,500

9,430

9,300

9,000

0

9,200

Beginning Stocks

651

651

1,480

1,450

0

1,260

Production

24,190

24,260

22,500

22,500

0

23,500

MY Imports

10

10

10

10

0

50

TY Imports

10

10

10

10

0

50

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

24,851

24,921

23,990

23,960

0

24,810

MY Exports

3,871

3,871

2,500

2,000

0

2,000

TY Exports

3,889

3,889

2,500

2,000

0

2,000

Feed and Residual

10,500

10,600

11,000

11,500

0

12,300

FSI Consumption

9,000

9,000

9,000

9,200

0

9,400

Total Consumption

19,500

19,600

20,000

20,700

0

21,700

Ending Stocks

1,480

1,450

1,490

1,260

0

1,110

Total Distribution

24,851

24,921

23,990

23,960

0

24,810

Yield

2.5463

2.5726

2.4194

2.5000

0.0000

2.5543

India: Sorghum, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons, Yield in MT/Hectare)

Sorghum

2013/2014

2014/2015

2015/2016

Market Begin Year

Nov 2013

Nov 2014

Nov 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

5,900

5,820

5,500

5,200

0

6,000

Beginning Stocks

145

145

108

248

0

148

Production

5,250

5,540

5,000

4,800

0

5,500

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

5,395

5,685

5,108

5,048

0

5,648

MY Exports

87

87

50

50

0

100

TY Exports

89

89

50

50

0

100

Feed and Residual

700

750

700

700

0

750

FSI Consumption

4,500

4,600

4,200

4,150

0

4,500

Total Consumption

5,200

5,350

4,900

4,850

0

5,250

Ending Stocks

108

248

158

148

0

298

Total Distribution

5,395

5,685

5,108

5,048

0

5,648

Yield

0.8898

0.9519

0.9091

0.9231

0.0000

0.9167

India: Millet, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons, Yield in MT/Hectare)

Millet

2013/2014

2014/2015

2015/2016

Market Begin Year

Nov 2013

Nov 2014

Nov 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

9,200

9,750

8,800

8,640

0

9,500

Beginning Stocks

450

450

470

510

0

310

Production

11,520

11,660

9,500

10,000

0

11,000

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

11,970

12,110

9,970

10,510

0

11,310

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

1,500

1,600

1,200

1,200

0

1,400

FSI Consumption

10,000

10,000

8,500

9,000

0

9,500

Total Consumption

11,500

11,600

9,700

10,200

0

10,900

Ending Stocks

470

510

270

310

0

410

Total Distribution

11,970

12,110

9,970

10,510

0

11,310

Yield

1.2522

1.1959

1.0795

1.1574

0.0000

1.1579

India: Barley, PSD

(Area in Thousand Hectares, Quantity in Thousand Metric Tons, Yield in MT/Hectare)

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Apr 2013

Apr 2014

Apr 2015

India

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

780

695

810

674

0

690

Beginning Stocks

120

104

231

215

0

210

Production

1,750

1,750

1,810

1,830

0

1,850

MY Imports

2

2

50

15

0

25

TY Imports

25

25

25

15

0

25

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

1,872

1,856

2,091

2,060

0

2,085

MY Exports

441

441

550

550

0

400

TY Exports

546

546

300

500

0

400

Feed and Residual

200

200

200

200

0

200

FSI Consumption

1,000

1,000

1,100

1,100

0

1,250

Total Consumption

1,200

1,200

1,300

1,300

0

1,450

Ending Stocks

231

215

241

210

0

235

Total Distribution

1,872

1,856

2,091

2,060

0

2,085

Yield

2.2436

2.5180

2.2346

2.7151

0.0000

2.6812