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

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