High maize prices in India will affect competitiveness
While most of the corn grain has been harvested, the prices still remain higher, indicating a lower corn crop than anticipated. The southern belt has been receiving excessive rains for the last few days, which might affect Rabi sowing, specially in Tamil Nadu.
With some hurried calculations done, Tamil Nadu’s poultry industry requires over 1.2 MMT of corn, while the production this year is expected to be 0.6 MMT of which 0.48 MMT will be in Rabi, the pressure will be on Karnataka and Andhra Pradesh to fulfil the requirements of maize in Tamil Nadu for its growing broiler and layer sector. With Gujarat, West Bengal also putting pressure on Andhra and Karnataka, prices are bound to go up in the near future.
The indicative prices at some of the varieties were as under:
Deshi Red, Rs.6200 ($139) per MT; Hybrid, Rs.6100 ($137) per MT; Local, Rs.5750 ($129) per MT; Kesari, Rs.5800 ($130) per MT; Yellow Rs.5575 ($125) per MT. In Cuddapah (AP), the prices of Deshi Red variety sold for an average price of Rs.6500 ($146) per MT, despite arrivals of over 1300 tons of material on Friday. In Maharahstra the average price at the markets was Rs.5640 ($126) per MT, while in Tamil Nadu the average price was Rs.5720 ($129) per MT. In Udamulpet, the hub of integration, the corn price at the market was Rs.6100 ($137) per MT.
In 2004 (Nov 26), the indicative prices in Andhra Pradesh was Rs.4990 ($112) per MT. This year the price increase is almost Rs.300 per ton, almost 6%. In Tamil Nadu the price was Rs.4810 ($108) per MT and the increase this year has been Rs.910 per MT, almost 19%.
It is unlikely that the prices are going to come down in near future, and increased demand and low supplies will give rise to speculation and certainly some sort of hoarding which will further increase the price of the commodity. With demand increasing and supplies low, the end users in the poultry, starch sector are in for tough times as their businesses cannot be run without corn.
For poultry it is one of the most vital ingredient and its low supplies, high prices will certainly affect the profitability of small farmers, feed millers and integrators in the long run. The starch sector too is increasing its capacities as the starch and other value added products are much in demand. A price beyond Rs.6000 ($135) per MT, delivered to the starch mill would reduce the profitability and affect the competitiveness of the products in the world market.
There has been much hype about making India a hub for processed food, but it must be seen that if Indian businesses have to scale such heights, the raw materials must be made available at reasonable prices without any restrictions.
In the US the CBOT closed at $1.896 per bushel ($74.62 per MT) for December delivery, almost $0.73 per MT lower than Nov 18, 2005 closing. March delivery closed at $ 2.026 per bushel ($79.74 per MT).
Biotech becoming popular in developing countries
As the population increases the Asia, specially India and China, the countries are bound to adapt biotechnology to feed its growing populations and the opposition is to biotech food crops like rice is likely to dissipate. As per Dr.Gurdev Singh Kush, a consultant to International Rice Research Institute (IRRI) and a World Food Prize recipient in an interview stated that some day GM rice will be approved in Asia. As per reports available, the number of rice consumers is likely to increase to 4 billion by 2030 and almost 70% of the rice consumers live in Asia.
China, India and the Philippines are pushing research on a few varieties of biotech rice containing the BT gene, which is resistant to the corn borer pest, the leading destroyer of corn crops in Asia.
Other biotech rice, containing the Xa21 gene which is resistant to the bacterial blight pest and golden rice rich in Vitamin A, are also being studied and may be released in comming years.
Iran on the other hand has claimed to be the first country to commercialize GM rice in 2004 after nearly 10 years of risk assessment, including field trials.
As Mr.Clive James, Chairman and founder of International Service for the Acquisition of Agri-biotech Applications (ISAAA), puts it, 'While the West argues, the developing world is planting biotech crops'
GM crops are being embraced in developing countries much faster and there is a greater interest in high-yielding, pest-resistant crops that can increase productivity and profits to the farmers.
In 2003 the number of developing countries growing biotech crops was 6, while in 2004, it increased to 11, almost double. As per ISAAA, More than 34 per cent of the global biotech crop area of 81 million hectares last year was grown in developing countries.
The benefits accrued to producers from biotech crops in 2003 in US were $1.9 billion, while in Argentina in 2001-02, the gains were to the tune of $1.7 billion. In 2010, China expects the gains to be $1billion from Bt Cotton and $4 billion from GM rice.
In India, it has been fours years since biotech cotton was introduced and the sales of transgenic seeds has jumped by over 30 times since than, if reports are to be believed. After the initial success, Monsanto plans to introduce Bt Cotton with 2 genes, which it claims will be 10 times more effective. Bollgard II, as it has been named is in its final year of field trials and will be released in the next season.
With GM Cotton and GM Rice is the forefront of the adoption in India and China, it is likely that the gains from the technology will be huge and benefit the small farmers in developing countries immensely and will also make them competitive in the world market. A study by Australian economists, predicts that the grains by biotech grains, oil seeds and fruit and vegetables would amount to $210 billion by 2015. This projection has been based on a full adoption with 10 per cent productivity gains in high and middle-income countries, and 20 per cent in low-income countries.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
November 26, 2005
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment