Indian corn, soybean prices fall as door opened to US imports

By 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. soyoil and a protein-rich animal feed under a new trade deal with Washington, stoking fears of cheaper supplies among farmers.

Farm unions and opposition parties, concerned about cheap U.S. supplies, have called nationwide protests for Thursday.

A joint statement from India and the U.S. last week said New Delhi had agreed to allow duty-free imports of soyoil and distillers dried grains with solubles (DDGS), a corn-based ethanol byproduct used as cattle feed.

Soybean and corn prices have fallen by 10% and 4% respectively since the interim framework was announced last week, rekindling anger among millions of small Indian farmers, whose 2020-21 protests forced New Delhi to repeal laws aimed at deregulating markets.

Although allowing U.S. DDGS imports is weighing on prices, the short-term impact is likely to be limited, said Harish Galipelli, director of ILA Commodities Pvt Ltd, a Hyderabad-based trade house.

Corn prices are trading around 1,820 rupees ($20.06) per 100 kg, well below the government-set support or guaranteed price of 2,400 rupees, as output hits a record high and demand slumps from ethanol producers.

Similarly, demand from domestic feed manufacturers remains weak, with the market worried that cheaper imports of DDGS could worsen the current supply glut, traders said.

India's summer-sown corn production rose 14% to a record 28.3 million metric tons, according to farm ministry estimates.

Rakesh Tikait, a prominent farm leader, said the government held no discussions with farmers before agreeing to the deal.

"We were kept in the dark, and the trade deal is a body blow to the farm sector, which is India's mainstay," he said.

Warning the government against proceeding with the deal, Tikait said: "There will be a nationwide protest on February 12, and after that we will intensify our agitation."

($1 = 90.72 rupees)