Commodity prices and storage; No Avian Flu, but awareness is the key

Commodity prices and storage

As the harvest in US progressed and reports suggest about 65% of the corn as harvested, the prices have tended to come down. Dec corn at CBOT was reported at $1.97 per bushel (($77.62 per MT), lower by about $1.78 per MT from last week. The FOB value for Dec corn was $101 per MT. For more details click on the link below.

http://www.grains.org/buying/market_perspectives/mp_10-28-05.pdf
In India, though the harvest is in full swing, but the corn prices are still higher. The Red corn variety available in Rajasthan, parts of Uttar Pradesh and parts of Andhra Pradesh was selling at Rs.6030 ($135) per MT. The yellow variety which is preferred by the poultry and cattle sector was selling at Rs.5500 – Rs.6170 ($123 - $138) per MT at the market place. The spot prices in Nizamabad (Andhra Pradesh) are reported at Rs.5387 ($121) per MT, while in Davangere (Karnataka) the prices were reported at Rs.5315 ($119) per MT.

In most of the south Indian markets the corn which is coming into the markets has high moisture content and is being sold at a discount. With more rains in the coastal areas of Andhra Pradesh, Tamil Nadu and also in parts of Karnataka storage of corn could pose a major problem in these areas. Poultry industry would prefer corn at a moisture content of 11- 12% as it can be stored easily. Corn with high moisture, when stored in bags, without any aeration tends to spoil due to presence of a fungus and the toxin Aflatoxin, which is harmful for poultry, cattle and humans alike.

The inflation hit a high of 4.71% last week due to increased prices of corn, gram, fruits, vegetables and manufactured items. As per RBI if the current trend of high prices continues it will be difficult to reign in the inflation at 5.5%, the RBI set barrier. Last year same time the inflation was 8%.

No Avian Flu, but awareness is the key

There is no bird flu in India and Government of India has set the system in motion of surveillance and testing for avian flu. Poultry Diagnostics and Research Centre (PDRC) — an autonomous research and diseases surveillance wing of the Venkateshwara Hatcheries (VH) Group has signed and agreement with Lasher Associates Inc, US, and Bombay Natural History Society (BNHS) for testing of migratory birds for bird flu. On the other side the Department of Animal Husbandry, Ministry of Heath, Ministry of Environment and forest are all coordinating the efforts on preparedness for the eventuality.

As per FAO, consumer responses to potential bird flu outbreaks are already having a disruptive impact on industries in Europe and beyond. In Europe the reaction has been mixed, for example in Germany there has been no change while consumption of poultry in Italy has declined by 40 percent. India learnt a bitter lesson in early 2004 when the consumption of eggs and chicken dropped due to panic only and the industry suffered a loss of over Rs.3000 crores ($675 million). At present there are no reports of any demand drop in Delhi market.

The market receives about 120 vehicles a day (96,000 to 100,000 birds) a day. Delhi’s demand is about 240,000 – 250,000 birds / day and almost 40% comes to the Delhi Poultry Market.

According to FAO, recent outbreaks of transboundary diseases and the imposition of disease-related export restrictions had an immediate impact on global meat trade in the 2004/2005. International meat prices, as represented in the FAO meat price index, which is calculated using trade-weighted indicative international prices, have risen to 10-year highs.

FAO has reminded consumers that avian influenza is not a food-borne disease and that the bird flu virus is killed by the heat of normal cooking. "There is no risk of getting avian influenza from properly cooked poultry and eggs." It is duty of the government and the industry to create awareness amongst the consumers who consume poultry meat and eggs and give this message.

http://www.fao.org/newsroom/en/news/2005/108286/index.html

It is also for the consumers to be aware and demand a clean, hygienic product from the industry and shops which sell chicken. Regulation of live markets would be a good point to start and Delhi Agricultural Marketing Board (DAMB) has already started its cleanliness drive, much before the avian flu fear can up. Plans are afoot to set up a state of the art poultry processing plant at live market.

But before that happens, a clean shed for the poultry slaughter has been provided, a security gate and room for the veterinarian have been erected. The veterinarian, on deputation from the Municipal Corporation of Delhi or Delhi Government will be responsible for ante-mortem and post-mortem of the poultry birds slaughtered here. A barricade has been erected to check any unauthorized entry into the premises.

India does not have any bird flu and this can be an advantage for the Indian poultry industry. Japanese government has cleared some of the poultry processing plants in India. Egg powder from India has already created a niche in the Japanese market.

Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com

October 31, 2005