When it comes to export of corn India is not a name you may hear often. In fact, India is going to export corn only from this year. There is a shortage of supply in the corn market from some of the major producers and India is trying to make its mark in the international corn market. Everything has gone well so far and India has made some deals even to export corn. A NDTV report stated:
“India earlier this month struck its first corn export deals in many years, taking advantage of shrinking global supplies, selling about 150,000 tonnes of corn Indonesia, Malaysia and Sri Lanka. Most of the deals were sealed at $160-$175 a tonne.
Some regional traders said Indian exporters had committed to sell another 50,000 tonnes, after the initial deals.
But local prices have surged more than 20 percent in recent weeks. Traders said Indian corn was now quoted at $200 a tonne. Traders had signed export deals earlier this month at prices as low as $160 a tonne, on a free-on-board basis.”
Now, we can the prospect of having a ban on corn export. Well, I feel that Indian decision makers failed to comprehend the situation and thus they had made the situation a bit complicated. They should set up a research cell to observe the situation and forecast about the future demand and supply of corn. The demand for corn is increasing worldwide. In India, the demand is increasing too. So, Indian government should focus more on increasing the production of corn.
If a good costs less in India than in the rest of the world, then India should export that good. If a good costs less outside of India, then India should import the good. As economists have pointed out, trade is essentially a type of technology. Trade turns the goods a country values less (exports) into goods the country values more (imports). Barriers to trade amount to destroying a nation’s most efficient factories. (In the US, for example, our most efficient car manufacturers may be our farmers, who produce wheat and corn which is then traded for cars.) Free trade, instead of bureaucratic and bloated import substitution, is the path to a wealthier, healthier society.
Posted by: oak bedroom furniture | November 27, 2006 9:48 AM | Permalink to Comment