South American countries are in the third year of a prolonged drought, which has forced many of the region's governments to declare a state of emergency. Argentina is currently suffering from the worst drought in 60 years.
Argentina and neighbouring countries have been suffering from drought conditions since 2019, with the last four months of 2022 receiving less than half of the average precipitation: the lowest rainfall in 35 years. This, combined with high temperatures, has caused widespread crop failure.
According to traders, importers in Malaysia and Vietnam are booking around 200,000 tonnes of Indian corn per month.
"The drought has reduced production in Argentina, and we continue to have supply issues from Ukraine due to the war," one Kuala Lumpur-based trader said on the sidelines of a grains conference in Singapore.
"Because India is offering competitive prices, there is increased interest in purchasing Indian corn." Argentina's corn production in 2022/23 is expected to fall to 41 million tonnes, down from 44.5 million tonnes previously estimated, according to the Buenos Aires grains exchange.
Early frosts could wreak havoc on the country's already stressed soybean and corn crops.
According to traders, Indian corn is quoted at around $310-$315 per tonne, including cost and freight (C&F), to Southeast Asia, while South American corn is offered at around $330 per tonne.
According to one of the traders, India is expected to continue corn shipments to Southeast Asia in the coming months due to ample supplies from crops in the country's southern regions. "We're getting good supplies from (Indian states) Karnataka, Tamil Nadu, and Andhra Pradesh," as per a trader.
