ANALYSIS-Indian corn export ban may end, swift action needed

By Naveen Thukral and Mayank Bhardwaj

SINGAPORE/NEW DELHI, Aug 28 (Reuters) - India is unlikely to extend a ban on corn exports beyond mid-October given an upcoming bumper harvest and soft local prices, but New Delhi should relent even sooner to prevent rivals from grabbing market share.

Although traders see little hope of the government easing export curbs on rice and wheat as the fragile federal coalition faces polls next year at a time of double-digit inflation, they say corn is an entirely different story.

But unless the ban is lifted sooner than the current Oct. 15 expiry, Indian suppliers could lose business in the Southeast Asian markets they have worked hard to crack.

"Earlier Indian corn was not very acceptable in Southeast Asia. We shouldn't lose that market," ," said Atul Chaturvedi, head of the agricultural arm of Adani Enterprises Ltd (ADEL.BO: Quote, Profile, Research), a commodities player in India.

"And why should we deny our farmers the opportunity of getting better prices in the export market?"

Though India's corn exports make up just 3 percent of global trade of over 100 million tonnes, it has become an important supplier to countries such as Malaysia, Vietnam and Indonesia, offering last-minute supplies when there are wild swings in prices.

India has also benefited from China's absence from the market due to its own export curbs, and with corn stocks in the United States, the world biggest exporter, likely next year to dwindle to their lowest level in 13 years.

But with surging global food prices, New Delhi's recent ban on corn exports runs the risk of it losing market share to its more traditional rivals in Latin America and the United States.