Corn prices going up steadily
The increased monsoon activity has played havoc in Maharashtra and is likely to effect Konkan, Gujarat, Andhra Pradesh, Kerala as well in the long run. While farmers in some parts have suffered major losses especially in Maharashtra, Gurajat and Konkan are not rules out. As per the reports received from IMD, the overall rainfall is 2% above normal (as on July 27) and only areas of Bihar, Jharkhand, and North Eastern States are not covered as yet. What is going to be the likely impact of these rains is yet to be seen.
Midweek saw very little activity in commodity sales as the markets were affected due to heavy rains in Maharashtra and surrounding areas.
Bajra prices slid little lower by end of the week from Rs.5900 ($135.5) to Rs.5890 ($135.4) per MT.
Average Barley prices which were at Rs.6546 ($150) per MT last week, slid to Rs.5937 ($136.5) by mid week and again went up to Rs.6438 ($148) per MT by week end.
Average Corn prices went up slightly from last week close at Rs.5655 ($130) to Rs.5763 ($133) per MT. The spot prices in Nizamabad and Davangere also showed an upward trend. Corn prices in Davangere were quoted at Rs.5625 ($129) up from last week’s Rs.5500 ($126) per MT, while in Nizamabad the prices were quoted at Rs.5950 ($137), up from last week’s Rs.5830 ($134) per MT. Reports from Gujarat indicated a high price of Rs.6900 ($159) per MT for corn delivered in feed mills in Baroda.
Prices in US for September corn went up slightly from $2.335 / bushel ($92.00 per MT) to $2.365 ($92.10 per MT).
It is interesting to note that if the prices for the month of July in India and US are compared, the estimated CNF prices at port in India are higher by 9.13% – 12.2 % when compared with Indian average prices in market yards in the states and 15.93% - 19.22% higher than Minimum Support Prices (MSP) set by Government of India.
Ethanol Industry going great guns in US
The face of the ethanol industry in US is changing and this time the Ethanol production is breaking free from the Midwest (corn belt) with new large plants coming up in Texas and upstate New York. The average plant size which until now was 40 million gallons (151.41 mill liters) will be 100 million gallons (378.54 million liters) per year.
The Upstate New York plant being developed by Northeast Biofuels is anticipated to break ground later this year, according to a company principal. It would be the first ethanol production facility in the East, and, going along with the new trend, will have an annual production capacity of 100-million gallons (378.54 mill liters – 2.38 million barrels a year)
Another 100-million gallon (378.54 million liter) ethanol plant is being developed in Texas by the Panda Group, which until now has developed mostly large natural gas-fired power plants. The ethanol plant will use a unique technology that eliminates the need for most if not all expensive natural gas, the second biggest cost in traditional ethanol plants, behind the corn feedstock. The proposed plant -- construction is scheduled to begin in September -- will use the synthetic gas produced from gasifying cow manure and cotton gin waste.
Cargill, is the third largest ethanol producer in the U.S and has recently announced three 100 million gallons plants. The plants will be built near its existing grain processing facilities in Linden, IN, Albion, NE and Bloomingburg, OH. Cargill says the plants will be operational by the end of 2006 or early 2007.
The trend towards large plants is driven by economies of scale. The per-gallon costs of inputs such as labor and the enzymes used to convert the corn starch to alcohol are reduced in large plants. But an industry expert notes that the demand for corn generated by such a large plant will have an effect on the price of corn, which went up by 30 cents a bushel ($11.81 per ton) in the area around a 100 million gallon plant when it opened in South Dakota. This effectively negated the cost reduction benefits derived from economies of scale, the expert contends. But it is good for the local farmers who have been able to sell the produce at a better price and will continue to reap profits from this new industry.
One way to become the low cost ethanol producer is to reduce the energy costs. The Panda group plant will be located in Hereford, Texas has altogether eliminated the use of natural gas. The plant is located where there is one of the largest concentrations of cattle feed yards in the U.S. The cattle manure will be collected, mixed with cotton gin waste and gasified. The resulting syngas will be used as the fuel source to heat corn mash during the fermentation process. It could also be used to dry the high protein co-product, left over once the corn starch, which is fermented to make the alcohol, has been removed. The distillers-dried grain, because it is high in protein, is valued as feed for cattle. Because the stockyards are so close and transportation costs will be lower it may be the protein co-product will not have to be dried. If it has to be stored for any length of time or shipped out of the region, it has to be dried to avoid it spoiling. The plant will cost $120 million and will start producing ethanol by late 2006.
The Northeast Biofuels plant will be located on the site of a shuttered brewery, 20 miles northwest of Syracuse. The plant could draw half the corn used from the Northeast, a company principal says. The plant would be located on the Intercoastal Waterway, 20 miles from Lake Ontario, giving it easy access to Midwest grain supplies. The resulting ethanol can be barged economically down the Hudson River to the major oil terminals, refineries and gasoline distribution facilities located in and near the Port of New York. The facility also has easy access to Toronto and Canada's Ontario Province, which will soon need 200 million gallons of ethanol annually to meet a government mandate.
The location of the plant in the East undercuts arguments by Northeast lawmakers, particularly New York's senior senator, Charles Schumer (D), who have denigrated ethanol with the argument it makes the Northeast dependent on Midwest farmers for its transportation fuel supply.
Northeast Bioenergy hopes to use some of the 420 acre site as a "test kitchen" for innovative biofuels production methods. New York is one of the most progressive states in developing and fostering the use of alternative transportation fuels. Governor George Pataki (R) has been a leading champion of alternative fuels and the state is helping to finance the Northeast Biofuels plant.
In addition to the Cargill, Northeast Biofuels and Panda Group 100-million gallon ethanol plants in development, there are a handful of other 100 million gallon plants in various stages of development. As an industry source put it, every 40 million gallon plant is looking to expand to become a 100 million gallon plant. Another industry insider predicted if an eight billion gallon (30.28 billion liters) renewable fuels standard becomes law the industry will quickly build nine billion gallons (34.06 billion liters) of capacity. While it has taken 25 years to reach 3.5 billion gallons (13.24 billion liters) of annual ethanol production the industry is on track to add another 1 billion gallons (3.78 billion liters) over the next year or two.
As per the report from World watch, some facts emerge
• World oil consumption surged by 3.4 percent in 2004, the fastest rate of increase in 16 years.
• Production is falling in 33 of the 48 largest oil-producing countries, including 6 of 11 OPEC members.
• In the continental U.S., oil production peaked at 8 million barrels per day in 1970 and fell to just 2.9 million barrels a day in 2004.
• Global production of fuel ethanol increased 13.6 percent in 2004, with Brazil and the U.S. dominating the market. World production of biodiesel is growing even faster, at 18 percent between 2002 and 2003.
And there is a major connection between the Automobile emissions and Global warming as per the report by world watch.
• By one estimate, the world’s glaciers lose at least 90 cubic kilometers of ice annually—as much water as all U.S. homes, factories, and farms use every four months. Scientists suspect that the enhanced melting is related to the unprecedented release of greenhouse gases by humans during the past century.
• Desertification puts some 135 million people worldwide at risk of being driven from their lands. As climate change translates into more intense storms, flooding, heat waves, and droughts, more and more communities will likely be affected.
Biotechnology research in India and other developing countries
India and China produce 84% of the world’s brinjal (egg plant) crop of which about 54 to 70% is lost due to disease and pest infestation, specially in India. One of the major pests effecting the crop is fruit and shoot borer and if GM brijal trials set up at Tamil Nadu Agricultural University (TNAU) are successful, the problem will be solved and the farmers will be benefited.
Current pest infestation forces farmers to use extensive pesticide application, which effects environments, human health and increases the production costs.
The current technology transfer is an excellent example of public private partnership, where MHYCO developed the technology and gave it to the Department of Plant Molecular Biology and Biotechnology of TNAU in backcrossed seeds. The project was also funded by USAID and Cornell University.
As per the study conducted by International Food Policy Research Institute (IFPRI), research on genetically engineered crops is booming at public institutions in countries like India, Egypt, Kenya, South Africa, Zimbawe.
Corporations are often seen as the only drivers of genetically engineered foods, but the reality is that a few African countries, despite their limited resources, have vibrant public biotechnology research programmes.
The study found Egypt was researching the largest variety of crops (8), followed by SA (7), Zimbabwe (3), and Kenya (2). Scientists in almost all countries are exploring ways to make crops resistant to insects, viruses, fungi and herbicides, or able to tolerate drought and salty soil.
South African public sector scientists are researching new varieties of genetically engineered maize, melon, millet, lupins, soy beans, strawberries, sugar cane, cotton, apples, tomatoes, sorghum, wheat, potatoes and grapes.
The study noted that most African public sector research on genetically engineered crops was still at the early stages, and yet to be commercialised. All such crops sold in SA (maize, cotton and soybeans), for example, were developed by foreign companies.
In India the public sector is doing research on almost 21 crops including food crops. Mr.Sharad Pawar, Union Minister for Agriculture, Consumer Affairs, Food and Public distribution, while chairing the Indian Council of Agricultural Research AGM stated that the biotech-based hybrid technology has a high potential to increase productivity, resistance to biotic and abiotic stresses, and quality in a number of field and horticultural crops, animals, and fish. It could also impart resilience to production in fragile ecosystems and meet the natural and man-made challenges of feeding a burgeoning population.
The government has a target to double the food grain production by the end of 11th five year plan (2012), which would mean increasing the total food grain production from the current 212 million metric tons to 424 million metric tons. “This would be possible only by developing world class biotechnology research facilities in the country and deploy biotechnological advances to Indian agriculture”, he said.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
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