Corn & Protein Prices, PLA in Japan, Council's importers manual,

Corn and Protein prices

 

While Corn and Protein prices in the US were more or less stagnant at USD 102 / 103 / ton FOB, prices in India surged ahead due to poor availability. Corn prices were quoted at Rs.7200.00 - Rs.7400  (USD 156 - 160) per ton in Coimbatore, Bombay area. Soybean prices were also higher and were quoted at Rs.17000 (USD 369) per ton delivered in Coimbatore.

 

The detailed market report for the week ending Aug 27, 2004 can be found at 

http://www.grains.org/buying/market_perspectives/mp_08-27-04.pdf

 

Recent reports suggest that  the cost of production of live chicken has risen to Rs.31.00 in South India from Rs.26 - 27.00 per kg due to increase in prices of raw materials specially corn and soybean meal. Export of chicken have been severely affected due to this. It is possible to ship chicken from Brazil @ USD 900 per ton (CNF) to Dubai, while it costs to produce chicken @ USD 1000 per ton in India. If immediate steps are not taken to curtail the price hike in, Indian chicken will be out priced soon. It might just be possible to import chicken into India and distribute than to produce locally. This move is likely to affect millions of people engaged in poultry farming. But as cost of production rises, sale prices come down, it will be difficult for many farmers and companies to sustain.

 

PLA products in Japan

 

Mitsubishi Plastics, Inc. has developed a plastic pipe made from PLA that is similar in strength and durability to the company’s PVC pipe and can be used as a drain pipe. Toray Industries, Inc. announced in July it has developed the world’s first flexible plastic film made from PLA that can be used as packaging film or in building materials or electronic devices. The film’s biodegradable, environmentally-friendly characteristics are expected to spur widespread demand for this product in the future.

 

U S Grains Council importers manual

 

In the past the council was providing a printed version of the Importers Manual. The latest version has been updated and redesigned and is available on the Council's website, in PDF format.

http://www.grains.org/buying/importer_manual.html

 

Should you need any more information on, please feel free to contact

 

Amit Sachdev,

Consultant, U S Grains Council - India,

FF 303 G, Sushant Shopping Arcade, Sushant Lok 1, Gurgaon - 122 002 (Haryana) India
Tel: +124-2396539 * Fax: +124-2396209 * Mb: +98110-61516

E mail: bluecross@touchtelindia.net

 

Local corn prices hit the sky, Two special products from corn, India partially lifts ban on imports of poultry,

Local corn prices hit the sky

 

Inflation reached close to 8% in the week ending (August 7). Government is worried at the rising food prices. The Cabinet Committee on Prices (CCP) is watching all prices. A report suggests that in the wholesale price index calculated, prices of eggs and chicken are also taken into account.

 

In all poultry production areas of the country, corn prices are reported to have touched the sky. Reports from Maharashtra, Tamil nadu, Parts of karnataka, the major consumption areas report prices to be touching over Rs.7000.00 per ton (USD 152 per ton), while the sale prices has slumped, which may not give the true indication of the inflation.

 

The international prices of corn are ruling at USD 104 FOB, the Indian end user (poultry as well as the starch producer) is at the cross roads and can not absorb such steep hike in prices and will be out of the world market. This increase is feed prices has led to increased cost of production of broilers and eggs.

 

When farmers in other countries can reduce their  cost of production and have access to commodities from international markets and can compete in the world market, why can't the Indian farmers have that choice and flexibility?

 

Even companies like Hero Honda are talking about sourcing raw material from international markets which is cheaper and will benefit their customers for (Times of India, Aug 20, 2004).

 

Two Special Products – manufactured from Corn can change the shape of the world to come - reduce environmental pollution and dependence on non renewable source.

 

As the crude prices rise to USD 50.00 per barrel, the future for developing countries become hazy. Increased petrol prices will hit the bottom line of all businesses, increasing inflation and thus prices of foods and other products. The writing on the wall is clear, the demand of petro products is rising and the source is depleting. Continued dependence on petro products will have to be curtailed. Though the developed countries have already started to look into the future, the developing countries need to look forward. They do not need to re-invent the wheel, which would mean more costs. New technologies are available, to make use of renewable sources to produce environmentally safe products.

 

Poly lactide (PLA) is one such product produced from Corn. Countries like Taiwan and Japan are gearing to change from petroleum based products to bio-degradable. Tests indicate that PLA decomposed faster than 31 other products tested under landfill conditions. 

 

Taiwan imported just 3,500 metric tons of resin in 2003. But the industry now expects sales to explode, reaching 400,000 metric tons of resin by 2010. That's equivalent to 1.6 million metric tons of corn. It also means 400,000 metric tons less of non-degradable plastics and reducing dependence on petroleum based plastic from a non renewable source.  The product costs about 1.6 times more than conventional plastics, but the prices are bound to come down, as more plants come up.

 

The Japan Hygienic Olefin and Styrene Plastics Association (JHOSPA) has issued approval for the use of polylactic acid (PLA) in products that come in contact with food, such as plates and bowls. The approval is expected to boost the commercialization of and demand for PLA products in Japan. Japan’s PLA market has grown about 40% each year since 1998 and is expected to utilize 120,000 tons of PLA (equivalent to 0.32 million metric tons of corn) by 2010.

 

Another product that could reduce dependence on non-renewable source is Ethanol from Corn.

 

Ethanol is a gasoline additive made from crops such as corn. Like other oxygenates such as methyl tertiary butyl ether, or MTBE, ethanol allows engines to more completely combust fuel. This results in fewer emissions polluting the air. Ethanol became more desirable after MTBE was shown to pollute ground water and was banned in many countries including United States.

 

World consumption of ethanol is forecast to grow between 2% to 3% a year over the next three years. The report, "Ethanol-The International Market 2002" (published by Gobi International), forecasts that the global ethanol market will be worth over US$16 billion by 2005, when total global consumption is expected to be over 41 billion liters, with the largest consuming regions being South America and Asia.

 

The U.S. ethanol industry is expanding at an unprecedented rate, heading towards annual production of 5 billion gallons (18.9 billion liters) of ethanol and 9 million tons of distillers grains by 2010. 

A recent survey from USDA suggests that roughly 20 percent of the U.S. corn crop will be used for ethanol production by the year 2012.

 

Ethanol production is the third largest and fastest growing market for U.S. corn.

 

The industry is expected to produce more than 3.3 billion gallons (12.47 billion liters) in 2004, up from 2.81 billion gallons (10.62 billion liters) in 2003, according to the Renewable Fuels Association. Currently, there are 78 ethanol plants on line in the United States; 10 additional plants under construction will soon add over 400 million gallons (1.51 billion liters) of annual production capacity.

 

Besides ethanol, byproducts include carbon dioxide, which can be used for carbonated beverages; and distillers' grain, which can be fed to dairy cows and poultry.

 

1 bushel (0.0254 tons) of corn yields 2.7 gallons of ethanol (10.20 liters) , 14.4 Kg starch, 5 Kg gluten feed, 1.4 Kg gluten meal and .72 L corn oil.

 

To convert in tons

 

1 ton of corn would produce 401.57 liters of ethanol, 566.92 kgs of starch, 196.85 kgs of Gluten Feed, 55.11 kgs of Glutten Meal and 29.34 liters of corn oil.   

 

(1 US gallon (liquid) = 3.78 liters)

 

India partially removes ban of poultry imports

 

Ministry of Agriculture and Ministry of Commerce, Government of India, through their notifications dated Aug 06,2004 have partially lifted the ban on import of day old chicks, hatching eggs, processed chicken & poultry products, processed pork products etc. The import of the above products is allowed from only those countries which have no report of Avian Influenza / Bird Flu. The notificatiosn can be accessed through the following link

 

Department of Animal Husbandry and Dairying http://dahd.nic.in/flu/notice%20aug06.htm

Ministry of Commerce & Industry http://164.100.9.245/exim/2000/not/not03/not4303.htm

 

 

Amit Sachdev
Consultant
U S Grains Council - India
FF 303 G, Sushant Shopping Arcade
Sushant Lok 1
Gurgaon - 122 002 (Haryana)
India
Tel: +124-2396539
Fax: +124-2396209
Mb: +98110-61516

E Mail: bluecross@touchtelindia.net

USDA predicts the largest corn and Soybean harvest, Corn Prices in India, Cost of Labeling GM Foods - A Filipino Study

 

USDA predicts a largest Corn harvest in US history and a second largest Soybean harvest

 

The U.S. Department of Agriculture confirmed expectations for large U.S. maize and soybean crops. It is expected that US will harvest a maize crop close to 276.93 MMT, up by 8% from last year, with a average yield of 3.78 tons / acre. This crop will be the largest in US history.

 

Soybean production is estimated at 78.38 MMT, up by 19% from 65.86 MMT last year, with an estimated yield of 1.04 tons / acre.

 

The crop usage is expected to be: 

 

Feed and residual use: 148.62 MMT

Food, Seed & Industrial use : 70.37 MMT (Up 8% from last year)

Ethanol : 34.80 MMT up from 30.48 MMT in 2003 and 25.30 MMT in 2002

 

With such a big crop, it is expected that the corn prices will be depressed. The agency in in July report predicted that the farm prices will be in the range of 80.68 - 96.42 / MT, down from last years range of 90.52 - 106.27 / MT.

 

Corn prices in India are firm

 

The Indian corn prices have declined, owing to the statement issued by Shri.Sharad Pawar, Minister of Agriculture of a good crop this year well. The drought fears have faded in almost all areas except in Uttar Pradesh. The fear of excessive rains in some belts still remains in some areas.

 

Reports suggest Corn prices to be close to Rs.6500.00 (USD 141) per ton in parts of Maharashtra and Karnataka. Prices in Tamil Nadu have also come down to Rs.6900 (USD 150) per ton, it may not remain low for long.

 

The demand for corn in India is expected to rise to 13.2 MMT. The breakup is as under

 

Poultry : 6.64 MMT

Food: 3.71 MMT

Livestock:1.46 MMT

Starch : 1.31 MMT

Brewery: 0.06 MMT

 

With the khariff production expected to be 9.4 - 10.4 MMT it will be a difficult situation for the end users sector, specially the poultry and livestock farmers who are dependent on stocks availability on a regular basis and is unable to store due to lack of finance. Sustained availability of the major raw material is a must for sustained development of the sector.

 

Cost of Labeling GM Foods - A Filipino Study

 

Govt. of Philippines has recently commissioned a study on "The cost implications of GM foods Labeling in the Philippines". The study was done by Augusto de Leon, Abraham Manalo & Fe Cielo Guilatco of (De Leon Consulting) and technical reports were supplied by Nina Gloriani-Barzaga

The study has tried to evaluate various labeling options as positive or negative, extensive or limited, mandatory or voluntary. The study has also analyzed cost implications  at Farm level, Food manufacturing sector and impact on consumers.

 

As per the study, mandatory labeling will require product differentiation between GM and non GM raw materials. This would entail segregation, IP (Identity preservation) and trace at farm level, which would result in increase in production cost and will also need parallel infrastructure. Estimates show that cost of producing certifiable GM free corn is about 12 percent higher than producing GM containing corn.

 

GM labeling will increase cost of manufacturing due to segregation and other costs. Need of two production lines, segregation of inputs and output, human resources etc will all add to the cost. The study estimates that the cost of manufacturing would increase by 12 percent.

 

As the cost of food manufacturing will increase by 12 percent, the same or a major part will have to be passed on to the customer, thus increasing food budgets. 

 

The detailed paper can be obtained from the following link.

 

http://www.isaaa.org/kc/Publications/htm/cbtbriefs/cbtbriefs4-2.htm

 

Various studies conducted world wide have come up with similar numbers and this would also be true for India. What is needed is a capacity building exercise, which would build and maintain testing facilities and continue to train people to provide safe & healthy food to the people of the country and also the world.

 

I do hope the report is of value to you. Should you need information on any matters, please feel free to contact me  at my E mail

 

bluecros@vsnl.com / bluecross@touchtelindia.net

 

Kind Regards

Amit Sachdev

 

US Commodity Prices, India Monsoon - Hi and Low - the game is on, GM foods as safe as traditional crops

US Commodity Prices

 

The market closed a little higher than last week. The freight rates have stagnated at last week’s levels. At week close the indicative prices were as under:

 

Corn: USD 105.50 / MT (Sept) – USD 107.00 / ton (Oct)

Sorghum: USD 109.00 / MT (Sept) – USD 110.50 / MT (Oct)

Barley: USD 115 / MT (Sept – Oct)

 

The soy meal prices have shown a down trend, which has also brought down prices of other plant proteins. Corn co-products specially corn gluten meal is being quoted at USD 324.00 / MT (Oct delivery) with 60 percent protein. It has slid down from high of USD 400.00 / MT.

 

India Monsoon – Hi and low – the game is on

 

Until last week (ending July 31, 2004), the deficiency in monsoon was over 40 percent. Now it is a problem of plenty. Areas of Punjab, Haryana, Himachal Pradesh, Gujarat, Maharashtra reported above normal monsoon, which may / may not cover the deficiency, but is surely going to effect agriculture production.

 

As regards maize (Corn) production, based on the assessment done, the expected production will range from 11.2 – 12.2 MMT. Based on seed sales and the planting the production is estimated at 11.4 MMT. The major losers are Gujarat & Rajasthan Other states anticipated to loose are Chattisgarh, Madhya Pradesh, Uttar Pradesh and Himachal Pradesh. While production will be higher in Karnataka (up from 1.0 MMT to 1.5 MMT), Andhra Pradesh, it will not be enough to cover the losses. It is also anticipated that the rabi crop will be higher, but not enough to cover the shortfall. The total consumption is expected to be 13.2 MMT with Poultry leading the way at 6.64 MMT, followed by Livestock and Starch at 1.5 MMT and 1.3 MMT respectively. The home use is expected to be stable at about 3.7 MMT (depending on the maize availability).

 

The maize prices are ranging from Rs.6700 / MT (USD 146) to Rs.7000 / MT (USD 152) depending on the transport cost and availability of the material. The feed costs have also shown an increase from Rs.12000 / MT (USD 261) to Rs.13200 / MT (USD 287) due to perceived shortages.

 

There will be a need to bridge the gap between the supply and demand and save the Indian end users from the clutches of the traders, who are creating a hike in the price.   

 

Study says GM food just as safe as food from traditional crops (from world grain.com)

 

WASHINGTON, D.C., U.S. — A new study on the safety of bioengineered foods by the U.S. National Academies of Science concludes that bioengineered crops pose no greater risk to the food supply than traditional crops.

 

As a result, the study advises federal agencies to review the safety of bioengineered foods on a case-by-case basis by focusing on changes in composition of end products rather than the technology used to produce them.

 

Conducted by the National Academies' National Research Council and the Institute of Medicine, the study stresses that such reviews should focus primarily on whether changes in composition could produce allergens or toxins. The committee overseeing the study determined that genetic engineering of food is not inherently dangerous, adding that adverse effects of such food on the human population never have been documented.

 

"All evidence to date indicates that any breeding technique that alters a plant or animal — whether by genetic engineering or other methods — has the potential to create unintended changes in the quality or amounts of food components that could harm health," said Bettie Sue Masters, the committee’s chairperson and a chemistry professor at the University of Texas Health Science Center in San Antonio.

 

The committee called attempts to assess food safety based solely on the method of breeding "scientifically unjustified" because any method — including traditional cross-breeding, other conventional breeding techniques and even chemical radiation — potentially can cause unintended changes in food.

 

Supporters of bioengineered foods praised the study’s findings, which quell concerns about potential hazards of food containing genetically altered ingredients.

 

Dr. Michael Phillips, vice-president of agricultural science and regulatory policy with the Biotechnology Industry Organization (BIO), called the report "another milestone in consumer acceptance of agricultural biotechnology."

 

"Coming from the Institute of Medicine, this report should lay to rest the few naysayers who continue to question the safety of these crops," Dr. Phillips said. The study resulted from requests by the U.S. Department of Agriculture, the Food and Drug Administration and the U.S. Environmental Protection Agency.

 

The USDA and the two agencies asked the National Academies to assess the potential for adverse health effects from bioengineered foods compared with foods altered in other ways and to provide guidance on how to identify and evaluate the likelihood of such effects.

 

The study noted that current safety assessments on genetically altered food focus on comparing bioengineered products with conventional counterparts to identify unique components.

 

Instead, the report proposes a new framework to examine unintended compositional changes in food, one that first determines whether compositional changes actually have taken place rather than first considering whether a product contains bioengineered ingredients

 

Should you need more information, please feel free to contact

 

Kind Regards

Amit Sachdev