According to Nandini Purandare, secretary of All India Starch Manufacturers Association (AISMA) if this is not allowed, prices of wet milling products and end-user products could rise, since maize constitutes about half the production cost of starch and derivatives.

Heavy unseasonal rains in southern and eastern regions and flooding in other corn producing areas have resulted in extensive damage to the kharif maize crop of 1998. This had led to an increase of 20 per cent in the prices of maize.

At present maize import is canalised through NAFED for poultry and cattle feed industries and is theoretically possible through Food Corporation of India (FCI) for other industries.

However, the starch industry has faced several difficultiies in importing through these agencies. It has therfore sought permission for actual user importthrough open general license (OGL).

It is surprising that end products such as starch and dextrose are already on the OGL list and their import would only geopardise competetiveness of user industries like textiles and pharmaceuticals, induce sickness in the domestic indusry and create a net loss in foreign exchange.

Short supply and high prices would affect poor sections which are major consumers of maize. Imports of maize would help keep a control on domestic prices during this crisis.

The association has, therefore, requested the ministries of commerce and agriculture to allow maize imports of one lakh metric tonnes for the current year in order to ease the maize availability crisis.

The Indian starch industry manufacturers starch, dextrose monohydrate, dextrose anyhydrous, sorbitol, glucose and other modified starches and derivatives. This is used in over thirty industries apart from textiles in the country. The user industries include pharmaceuticals, paper, chemicals, and food processing amongothers.

Maize production in the country has stagnated at about 90 lakh tonnes during the last decade. The corn wet milling industry which produces starch, starch products, derivatives and by-products uses about seven to eight lakh tonnes. Thirty lakh tonnes is used by the poultry and cattlefeed industry and the rest is consumed as staple food by a large percentage of the Indian population.

The reason for asking for permission to import one lakh mt is due to a smaller crop of 70 lakh tonnes and the prices have shot up to Rs 7,200 per mt from Rs 3,900 per mt. Purandare feels that if timely import is not permitted, the onion story will be repeated in maize.

Starch industry also exports Rs 15-20 crores worth of its products and therefore will be eligible to avail of Advance License System. However, the industry will have no avenue to import the required input if requisite policy changes are not made, she argued.

In a memorandum sent to the union commerce minister, AISMA has pointed out that three out ofthe 13 manufacturers are into exports and the rest supplies the domestic industry. In fact, the provision for importing minimum 1.00 lakh mt constitutes only 10 per cent of the total consumption requirements of the entire industry.

Under the revised Exim policy, if the new license is issued, the members will have to surrender three times the value of special import license as against one time the value of special import license as against one time the value of special import licence to match the CIF value of imports.

This is very harsh requirement and must be revised to the earlier requirements especially in the case of starch industry as it is already suffering from the pangs of high input cost.

The country's per capita consumption of starch has immense potential and could accelerate to around the world average growth rate of 12 per cent. This is much higher than the projected five per cent growth rate.

The prospects for starch industry industry are bright if the per capita consumption figure of 0.6kilograms is taken into consideration against the world average of 6.5 kilograms.

According to a conservative estimate, the demand for paper and board will increase to 9.7 million mt against the present 3.5 miliion mt per annum.

The food industry will also require additional quantities of starch and starch derived products. The CII-McKinsey report, FAIDA states that the industry is expected to double within a decade, with value-added products increasing three fold.

The confectionary industry for example, is expected to grow at least five times by the year 2005. This means that the requirement for glucose syrup itself will grow to about 7,50,000 mt from the existing level of 1,50,000 mt per annum.