India has banned the export of corn (maize) with immediate effect till Oct. 15, the country’s commerce and industry ministry said.

However, no reasons were provided in the statement issued by the Directorate General of Foreign Trade (DGFT) of the commerce ministry.

Analysts believe that this measure was taken in order to tame spiraling inflation. For the week to June 14, India’s inflation was clocked at 11.42 percent, its highest in more than 13 years, from 11.05 percent a week earlier.

Corn contributes for 0.185 percent to the wholesale price index (WPI), the widely watched inflation tracker.

India’s corn exports are expected to stand at 2 million tonnes for the year to end-June according to the United States Department of Agriculture.

According to India’s ministry of agriculture, the country harvested a record 18.5 million tonnes of corn this year, up 22.5 percent from a year earlier.

Following the export ban news, at 4.00 p.m. on the National Commodities Derivatives Exchange, corn for August delivery fell to its lower limit of 4 percent at 972 rupees per 100 kilograms.

While on the Chicago Board Of Trade, in the access hours of trade, corn for December delivery last traded 0.32 percent lower at $7.78 per bushel after hitting an intra-day low of $7.68.

On March 13, India had banned the export of all edible oils for one year from March 17. India also boasts of having procured 22.23 million tonnes of wheat and 26.06 million tonnes of rice since the start of April.

The country’s ministry of agriculture had earlier said: “We have very satisfactory stocks of wheat and rice; adequate supplies will be provided to the public distribution system (PDS); and the stocks will be sold in the open market, when necessary, to restrain prices.”

On June 24, India’s central bank, in a move to tame inflation, had raised its repo rate, the rate at which it lends money to banks, by 50 basis points to 8.50 percent and raised its Cash Reserve Ratio (CRR), which is the mandated level of reserves to be maintained by banks, to 8.75 percent from the earlier 8.25.

Source: http://www.afxnews.com

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