Maize prices ruling high in India
Even though the harvest of Khariff crop is almost over and farmers are getting ready for Rabi sowing in most parts of the country, the maize prices are much higher than last year. Market reports reveal feed millers and starch manufacturers are procuring maize delivered at their site at Rs.7000 ($157) per ton. There are reports that the prices in states like Uttar Pradesh, Rajasthan and Gujarat are very high and most of North India procures maize from these states. It is believed that the maize crop in Uttar Pradesh was affected due to drought at the start and later due to untimely rains.
Reports from some parts of Andhra Pradesh indicate that almost 30% of the crop has been damaged due to un-timely rains and government of India has also relaxed the rules of Fair Average Quality (FAQ), the basis on which it procures grain from the market. It would mean that lower quality grains would also be picked by the agencies at the same price at good quality.
Production estimates have been worked out by various agencies and trading companies. Based on market information, it is estimated that the production of Maize in Khariff is about 9.4 – 9.6 MMT and during Rabi it is expected to be 2.5 – 2.6 MMT due to high soil moisture and good irrigation that would be available during the season. With a demand of over 13.8 MMT and production at 12.1 – 12.2 MMT, the prices are bound to remain higher.
Some current price indications are Red – Rs.6000 ($ 134.8), Gajjar Rs.5700 ($128), Hyb/Local Rs.5975 ($134.3), Yellow 5250 ($118) per MT. The prices are at market yards and costs like commission, packing, loading and transport, will need be added.
In parts of Andhra Pradesh where though crop is higher than last year, rain damage has affected the quality. The damaged grain is of no use for the poultry industry, but can be used by the starch sector, under special circumstances.
In parts of Karnataka too, the same story is unfolding. Maize with high moisture content was being brought in the markets.
Due to the increased price of maize , the feed pries are likely to increase in near future which will affect the profitability not only of the small farmers but large integrators as well. Though India is the second lowest cost producer of broiler in the world, it may lose out if the commodity prices remain high.
In US the prices remained firm and there was no change in prices as on last week. Dec corn closed at $77.62 per MT, while March corn closed at $82.65. The US rail and barge rates declined and this has also helped in firming the prices in domestic markets. The FOB rates Dec corn is $97.5 per MT while Jan corn was $99 per MT.
Detailed market report from US Grains Council can be found at:
http://www.grains.org/buying/market_perspectives/mp_11-11-05.pdf
Socks made out of Corn
The environmental benefits of biodegradable fibers are one of the selling points for a new line of socks introduced this week in Japan. The socks promoted by North Carolina's Harriss & Covington Hosiery Mills, is made out of Ingeo fiber, a corn-based bioplastic from NatureWorks, in place of petroleum-based fibers. Ingeo fibre, is the 'world's first man-made fibre' produced from corn extrusion. The bioplastic fibers offer excellent wicking, moisture management and comfort properties, in addition to being biodegradable under appropriate conditions. The hosiery line, which includes running, walking, climbing, cycling, golf and specialty children’s socks, will be available in 2006. If the new line of socks is successful in Japan, the manufactures may market them in Europe and the United States. (photo courtesy: www.yahoo.com)
Indian broiler sector has the potential, but for raw material availability
The Indian broiler industry which has been growing at about 10% per annum, can grow much faster, provided the inputs are available at reasonable prices.
It will be possible to provide safe, high quality chicken to the consumers at affordable prices. The new food law and the amendment to the Meat Food Products Order of 1973 will make it possible for the companies to promote processed poultry to the consumers and increase its demand.
But if the prices of raw material, especially maize fluctuates, it will difficult for the poultry farmers to keep the cost of production down. With the current feed price of Rs.11 per kg ($0.24) in South India the cost of production of a kg of live chicken is Rs.27.67 ($0.62) (at farm gate). An increase of Rs.1 in feed price is likely to increase the cost of production to Rs.29.47 ($66) per kg. i.e., a Rs.1 increase in feed causes the cost of production to increase by Rs.1.8 for 1 kg of live chicken, thus reducing the profit margin of the farms by the same amount on a kg of chicken.
If feed millers are buying maize at over Rs.6500 ($146) per ton during the harvest, the traders predict the prices to hit Rs.7500 ($166) per MT in summer time, which is likely to affect the profitability still further. There have been instances in the past when increased prices of raw materials and low profitability have forced many farmers to close farms and look for alternate jobs. It is high time that Government of India considers a policy to make available maize at a reasonable price by way of own production or by way of imports. It is a way to bridge the gap between supply and demand. The supply in 2005-06 is expected to be 12.2 MMT and the demand likely to touch 13.73 MMT and could be more of poultry exports start in a big way to Japan.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
November 12, 2005
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment