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
Saturday, July 30, 2005
Saturday, July 23, 2005
Commodity prices on a high; Production estimates for commodities; Can changes in retailing food sow changes in buying
Commodity prices on a high
Bajra (Perl Millet): The last two weeks have seen an upswing in the prices of Pearl Millet of all varieties. The maximum price quoted was Rs.7134 ($164) per MT. In all states the prices are going up except in Karnataka and Rajasthan where prices down due to increased availability in the market. The last prices quoted were Rs.5000 ($115) per MT and Rs.6050 ($139) per MT respectively.
Sorghum (Jowar): The prices have again shown an upward trend for all varieties, with yellow sorghum being traded at Rs.9950 ($229) per MT. In all the state markets the sorghum prices are much above Rs.8700 ($200) per MT mark except in Karnataka where the trade prices is close to the Minimum Support Price (MSP) of Rs.5250 ($121) per MT or a little higher.
Maize (Corn): In the last two weeks, the prices have again increased and yellow maize reach a high of Rs.6790 ($156) per MT. In Gujarat the prices were the highest and maize was trading at Rs.6700 ($154) per MT. On Friday the prices for Deshi Red and Kesari (bright yellow) varieties were reported to be Rs.6000 ($138) per MT and Rs.6775 ($156) per MT.
On the spot market, maize is available from Davangere (Karnataka) at Rs.5500 ($126) while from Nizamabad (Andhra Pradesh) it is available at Rs.5840 ($134) per MT.
Barley: Barley prices are also showing an upward trend and reached peak of Rs.6830 ($157) per MT for a variety, while in Uttar Pradesh, barley was traded at an average price of Rs.7090 ($163) per MT.
In US the prices are also going up due to hot weather in the Midwest (Corn growing belt). CBOT closed at $2.334 per bushel ($91.88 per MT. In Europe, countries like France have adopted water rationing due to extreme weather conditions. Framers have been advised not to minimum water and plant only those crops which will be able to take water strees. Crop production is likely to be severely effected in Europe this season.
Production estimates for commodities
Bajra (Pearl Millet): In 2004-05, government of India estimates the production to be close to 6.46 MMT, a little lower than 2003-04 production estimates of 6.56 MMT from almost 9.00 million hectares of land. Based in the trend-line approach, the production of Barja is expected to be similar, but the land area is expected to go down in coming years. The yield is expected to be higher and grow due to introduction of new hybrids.
Sorghum (Jowar): 2004-05 production of Sorghum is expected to be 7.53 MMT, which is about 34% lower than the production in 1993-94 (11.41 MMT). Based on the analysis, it is expected that the sorghum production will be steadily declining and also the land under Sorghum will also be down. The yield is expected to remain at 800 kgs/hac level unless some new hybrids are introduced.
Maize: As per the 2nd estimates the maize production in 2004-05 was expected to be 13.58 MMT, while the target was fixed at 15 MMT. The Industry is of the opinion that the production is close to 12.2 – 12.6 MMT, almost a difference of 1 MMT. Based on the trend line analysis, the land under corn is expected to remain same at about 6 – 6.6 Mill hac. The maize demand in 2010 is expected to be 16.65 MMT, while some analysts believe that India will be able to produce 15 MMT, some are of opinion that the production will be 16.95 MMT by 2010. The increase in corn production will be due to increased productivity due to new genetics and replacement of local cultivars and OPV with hybrid corn varieties.
Reports of Ministry of Agriculture for sowing in 2005-06 indicate a mixed bag. Until July 19, 2005, reports suggests that pulses are the most effected and the coverage is only 64% of last year. In case of rice the coverage is about 74%, while in Coarse Cereals the coverage is higher than last year (104%). In Sugarcane also the coverage is higher than last year (109%), while in oilseeds the coverage is only 83% of last year.
Can changes in retailing food sow changes in buying? (From meatingplace.com
Jon Hauptman, vice president of Barrington, Illinois based consulting company was a presenter at the National Chicken Council's 2005 Chicken Marketing Seminar. As per him, "Everybody is looking to get into the food business and success and even survival depends on standing out in the very crowded marketplace."
At the seminar he provided nine retail trends that are key for the chicken industry —or any food industry, for that matter — to watch and need to be watched.
1. Decline outings for food purchases: Data from US reveals that the supermarket trips per households are going down. As per ACNielsen, the trips per household have dropped from 85 in 1998 to 70 in 2004. The reason is the outings to specialized stores to buy food rather than traditional grocery store.
2. Supply Chain efficiency a solid recipe for success: Wal-Mart achieved $12 billion in growth last year alone, nit because of size alone, but also because of supply chain innovations and bringing down costs to a large extent. Suppliers will need to increase their own supply chain efficiency in order to stay in the market place.
3. Economies of scale need to go with the local needs: The economies of scale in some cases have not brought expected cost savings. Retailers will need to take a more localized approach, concentrating on filling local consumers' unique needs. "One needs to have the finger on the pulse of the local market needs in order to do well”, he said.
4. Retailers organizing around need states (instead of demographics): Currently supermarkets are not the No. 1 choice to satisfy any of those need states like budget buying, smart stock up for a family. Customers might visit other retailers to fulfil these need states. However, there is any opportunity for chicken processors, among other food companies, to help supermarkets develop various programs to fill those needs, especially because supermarkets have the potential to stand out in the perishables category.
5. Leaders will extend their reach with new store formats and offerings: With wellness being the key mantra, the format is saleable. The phenomenon offers a lot of chances for innovation, particularly with perishables. As a result, he said, poultry companies must support such new concepts with the right products, innovative merchandising and creative promotions that fit each specific format. "One size will not fit all in the retail environment going forward," Hauptman said.
6. Value proposition of retail winners extends well beyond product and price: It is important that the retailer involves local communities as traditional form of advertising seems less effective. Stores themselves will need to become communication vehicles. Consequently, according to Hauptman, retailers are seeking vendor partners that can help them give back to the community as well as address consumers' health and wellness concerns.
7. Retailers becoming sophisticated marketers: Retailers are starting to use strategies such as leveraging loyalty-card marketing data to offer consumers targeted discounts. Hauptman encouraged poultry processors to look for parallel opportunities with their own offerings. "Maybe there are some value-added chicken products that could become signature items," he suggested.
8. Pricing is the hot topic: Retailers are refocusing on strengthening their price image and making sophisticated pricing decisions, Hauptman said, and they want help from suppliers in terms of setting optimal prices. "A topic that might have been taboo before when you were calling on your retailers may not be taboo today," he said.
9. Retailers focused on optimizing the box: The trend now in the food retail industry is toward smaller stores and aisle management. Retailers do not manage a category any more, but shelf space, where decisions like whether space for a product should grow, where extra space should come from, the costs of making shelf changes and the related return on investment. Processors, Hauptman advised, must help their retail customers appreciate the true value their products can offer.
He encouraged all of the poultry processors work closely with retail customers to help them better understand and serve their customers. For every one of these trends, there are corresponding opportunities for the poultry industry and we in India are also seeing the changes as food stores come up across the country and the Processors in India also need to think out of the box and change the way business is done. It will help all in the supply chain, the farmers, the processors, retailers and of course the customer. It is must that the processors and the retailer work together to understand customer needs and make products available as per the requirements.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Bajra (Perl Millet): The last two weeks have seen an upswing in the prices of Pearl Millet of all varieties. The maximum price quoted was Rs.7134 ($164) per MT. In all states the prices are going up except in Karnataka and Rajasthan where prices down due to increased availability in the market. The last prices quoted were Rs.5000 ($115) per MT and Rs.6050 ($139) per MT respectively.
Sorghum (Jowar): The prices have again shown an upward trend for all varieties, with yellow sorghum being traded at Rs.9950 ($229) per MT. In all the state markets the sorghum prices are much above Rs.8700 ($200) per MT mark except in Karnataka where the trade prices is close to the Minimum Support Price (MSP) of Rs.5250 ($121) per MT or a little higher.
Maize (Corn): In the last two weeks, the prices have again increased and yellow maize reach a high of Rs.6790 ($156) per MT. In Gujarat the prices were the highest and maize was trading at Rs.6700 ($154) per MT. On Friday the prices for Deshi Red and Kesari (bright yellow) varieties were reported to be Rs.6000 ($138) per MT and Rs.6775 ($156) per MT.
On the spot market, maize is available from Davangere (Karnataka) at Rs.5500 ($126) while from Nizamabad (Andhra Pradesh) it is available at Rs.5840 ($134) per MT.
Barley: Barley prices are also showing an upward trend and reached peak of Rs.6830 ($157) per MT for a variety, while in Uttar Pradesh, barley was traded at an average price of Rs.7090 ($163) per MT.
In US the prices are also going up due to hot weather in the Midwest (Corn growing belt). CBOT closed at $2.334 per bushel ($91.88 per MT. In Europe, countries like France have adopted water rationing due to extreme weather conditions. Framers have been advised not to minimum water and plant only those crops which will be able to take water strees. Crop production is likely to be severely effected in Europe this season.
Production estimates for commodities
Bajra (Pearl Millet): In 2004-05, government of India estimates the production to be close to 6.46 MMT, a little lower than 2003-04 production estimates of 6.56 MMT from almost 9.00 million hectares of land. Based in the trend-line approach, the production of Barja is expected to be similar, but the land area is expected to go down in coming years. The yield is expected to be higher and grow due to introduction of new hybrids.
Sorghum (Jowar): 2004-05 production of Sorghum is expected to be 7.53 MMT, which is about 34% lower than the production in 1993-94 (11.41 MMT). Based on the analysis, it is expected that the sorghum production will be steadily declining and also the land under Sorghum will also be down. The yield is expected to remain at 800 kgs/hac level unless some new hybrids are introduced.
Maize: As per the 2nd estimates the maize production in 2004-05 was expected to be 13.58 MMT, while the target was fixed at 15 MMT. The Industry is of the opinion that the production is close to 12.2 – 12.6 MMT, almost a difference of 1 MMT. Based on the trend line analysis, the land under corn is expected to remain same at about 6 – 6.6 Mill hac. The maize demand in 2010 is expected to be 16.65 MMT, while some analysts believe that India will be able to produce 15 MMT, some are of opinion that the production will be 16.95 MMT by 2010. The increase in corn production will be due to increased productivity due to new genetics and replacement of local cultivars and OPV with hybrid corn varieties.
Reports of Ministry of Agriculture for sowing in 2005-06 indicate a mixed bag. Until July 19, 2005, reports suggests that pulses are the most effected and the coverage is only 64% of last year. In case of rice the coverage is about 74%, while in Coarse Cereals the coverage is higher than last year (104%). In Sugarcane also the coverage is higher than last year (109%), while in oilseeds the coverage is only 83% of last year.
Can changes in retailing food sow changes in buying? (From meatingplace.com
Jon Hauptman, vice president of Barrington, Illinois based consulting company was a presenter at the National Chicken Council's 2005 Chicken Marketing Seminar. As per him, "Everybody is looking to get into the food business and success and even survival depends on standing out in the very crowded marketplace."
At the seminar he provided nine retail trends that are key for the chicken industry —or any food industry, for that matter — to watch and need to be watched.
1. Decline outings for food purchases: Data from US reveals that the supermarket trips per households are going down. As per ACNielsen, the trips per household have dropped from 85 in 1998 to 70 in 2004. The reason is the outings to specialized stores to buy food rather than traditional grocery store.
2. Supply Chain efficiency a solid recipe for success: Wal-Mart achieved $12 billion in growth last year alone, nit because of size alone, but also because of supply chain innovations and bringing down costs to a large extent. Suppliers will need to increase their own supply chain efficiency in order to stay in the market place.
3. Economies of scale need to go with the local needs: The economies of scale in some cases have not brought expected cost savings. Retailers will need to take a more localized approach, concentrating on filling local consumers' unique needs. "One needs to have the finger on the pulse of the local market needs in order to do well”, he said.
4. Retailers organizing around need states (instead of demographics): Currently supermarkets are not the No. 1 choice to satisfy any of those need states like budget buying, smart stock up for a family. Customers might visit other retailers to fulfil these need states. However, there is any opportunity for chicken processors, among other food companies, to help supermarkets develop various programs to fill those needs, especially because supermarkets have the potential to stand out in the perishables category.
5. Leaders will extend their reach with new store formats and offerings: With wellness being the key mantra, the format is saleable. The phenomenon offers a lot of chances for innovation, particularly with perishables. As a result, he said, poultry companies must support such new concepts with the right products, innovative merchandising and creative promotions that fit each specific format. "One size will not fit all in the retail environment going forward," Hauptman said.
6. Value proposition of retail winners extends well beyond product and price: It is important that the retailer involves local communities as traditional form of advertising seems less effective. Stores themselves will need to become communication vehicles. Consequently, according to Hauptman, retailers are seeking vendor partners that can help them give back to the community as well as address consumers' health and wellness concerns.
7. Retailers becoming sophisticated marketers: Retailers are starting to use strategies such as leveraging loyalty-card marketing data to offer consumers targeted discounts. Hauptman encouraged poultry processors to look for parallel opportunities with their own offerings. "Maybe there are some value-added chicken products that could become signature items," he suggested.
8. Pricing is the hot topic: Retailers are refocusing on strengthening their price image and making sophisticated pricing decisions, Hauptman said, and they want help from suppliers in terms of setting optimal prices. "A topic that might have been taboo before when you were calling on your retailers may not be taboo today," he said.
9. Retailers focused on optimizing the box: The trend now in the food retail industry is toward smaller stores and aisle management. Retailers do not manage a category any more, but shelf space, where decisions like whether space for a product should grow, where extra space should come from, the costs of making shelf changes and the related return on investment. Processors, Hauptman advised, must help their retail customers appreciate the true value their products can offer.
He encouraged all of the poultry processors work closely with retail customers to help them better understand and serve their customers. For every one of these trends, there are corresponding opportunities for the poultry industry and we in India are also seeing the changes as food stores come up across the country and the Processors in India also need to think out of the box and change the way business is done. It will help all in the supply chain, the farmers, the processors, retailers and of course the customer. It is must that the processors and the retailer work together to understand customer needs and make products available as per the requirements.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Monday, July 18, 2005
Prices of all commodities stable to high; Controversy on biotech commodities goes to court; Poultry on the rise, efficiency increasing in India
Prices of all commodities stable to high
While there is much speculation about the way monsoon is proceeding, the commodity prices are stable to high in almost part of the country. Parts of Muzaffarnagar and other towns in Bihar which form the Maize belt have been hit by flash floods, further giving rise to speculations about the way the commodities are stored.
The maize prices on a variety basis showed an increase and the prices ranged from a low of Rs.5960 ($137) per ton to a high of Rs.6790 ($156) per ton. The future prices are reported at Rs.5780 ($133) per ton for July and August, while for Sept the price are down slightly to Rs.5700 ($131) per ton.
Prices of other commodities over the last one year have shown an increasing trend. While Wheat was selling at Rs.6800 – 6900 ($156 – 160) in Jun – July 2004, it is was traded at Rs.7180 – 7560 ($165 – $175) in June – July 2005. Similarly the prices of Jowar (Sorghum) have increased from Rs.7500 ($172) per ton to Rs.8500 ($195) per ton and Bajra (Pearl Millet) increased from Rs.6000 – 6500 ($138 – 149) per ton to Rs.8500 – 9000 ($195 - $206) per ton.
This is despite the fact that the GOI has given assurance of a good monsoon and a good sowing in the coming Khariff Season.
In the US the prices have shown an upward trend due to ongoing hot weather and less rainfall in the corn belt. The July delivery the CBOT prices have shown an increase of 8.4% in one week (July 8 to July 15) from $89 perton to $96.55 per ton. For September delivery the rates increased by 9.8%, up from 92.40 per ton to $101.50 per ton. The FOB values correspondingly increased or July to $111 per ton and August to $112 per ton.
For details on corn prices, visit the link below
http://www.grains.org/buying/market_perspectives/mp_07-15-05.pdf
The WASDE report on July 12, 2005 estimates a lower corn production for 2005/06 due to hot weather. The production has been reduced to 274 MMT as against last year production of 299 MMT. The yield has also been reduced to 3.6 tons/acre from last year’s yield of 4.07 tons/acre. The use of corn for ethanol production has been increased from last year’s 33.65 MMT (11.25% of the production) to 38.10 MMT (13.90%) of the production.
The report also predicts 1 MMT of wheat imports for India after a period of 6 years.
For more details on the WASDE report, please visit the link below.
http://www.ers.usda.gov/publications/waobr/view.asp?f=wasde-bb
Controversy on biotech commodities goes to court
A Public Interest Litigation (PIL) has been filed in the Supreme Court against the release of Genetically Modified Seeds and Products in the environment. The PIL seeks a ban on the speedy release of these products.
The PIL also seeks a ban on the import of oil from countries like Argentina, where almost 80% of the soybean crop in GM.
World over, while there is an ongoing debate on the utility of the GM technology, which is a tool to enhance the productivity of the agriculture crops, ensures environment safety and also enhancing human health (less pesticide use) and provides major savings to the farmers, its use in the developed worlds in increasing at a fast pace. 2005 was the year to plant the billionth acre of land with GM seeds in the world.
The Bench has also said that there could be two views on the utility value of the GMO and a debate is on about it.
There are many scientists in India who are working in India as well. While there is work going on in ICRISAT on enhanced Drought Tolerance in Sorghum, Millet, Chickpea, Groundnut and Pigeon pea. Else where work is being done on increase the shelf life of tomato, pest resistance in Brinjal (egg plant) and increase vitamin A in rice.
All the advancements use fine science to fine tune the product for the betterment of mankind.
If you have any queries on the GM technologies and how it effects the farmers and end users, the Council has web videos of different topics which can be reached from the following link.
http://www.grains.org/grains/page.ww?section=Education+Center&name=Web+Video
Please feel free to use the information for the benefir of the community.
Poultry on the rise, efficiency increasing in India
With the new genetic stock available currently in India, the production base in increasing slowly. In 2005-06 the broiler population is expected to reach 1694 million which will produce 1854 TMT of broiler meat. The per capita consumption is expected to increase from 1.56 kg per year in 2004-05 to 1.68 kg per year in 2005-06, but is still very low. The efficiency of production is probably the highest in Coimbatore with average FCR reaching 1.7 (1.7 kg feed to produce 1 kg of live bird). In the north the average FCR is about 1.9 – 2.0.
On the layer front also the farmers in the southern areas, particularly are much ahead than their north counterparts. The average hen housed (HH) egg production is 310 – 315 eggs in 72 weeks of age, while in the north the average production is close to 290 eggs HH.
This is probably one reason of increased expansion in the Namakkal area, which currently has over 20 million birds in production in a 50 km radius producing 15 million eggs per day. By 2006 the birds in production are expected to increase to 25 million.
If you need more information on related topics please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
While there is much speculation about the way monsoon is proceeding, the commodity prices are stable to high in almost part of the country. Parts of Muzaffarnagar and other towns in Bihar which form the Maize belt have been hit by flash floods, further giving rise to speculations about the way the commodities are stored.
The maize prices on a variety basis showed an increase and the prices ranged from a low of Rs.5960 ($137) per ton to a high of Rs.6790 ($156) per ton. The future prices are reported at Rs.5780 ($133) per ton for July and August, while for Sept the price are down slightly to Rs.5700 ($131) per ton.
Prices of other commodities over the last one year have shown an increasing trend. While Wheat was selling at Rs.6800 – 6900 ($156 – 160) in Jun – July 2004, it is was traded at Rs.7180 – 7560 ($165 – $175) in June – July 2005. Similarly the prices of Jowar (Sorghum) have increased from Rs.7500 ($172) per ton to Rs.8500 ($195) per ton and Bajra (Pearl Millet) increased from Rs.6000 – 6500 ($138 – 149) per ton to Rs.8500 – 9000 ($195 - $206) per ton.
This is despite the fact that the GOI has given assurance of a good monsoon and a good sowing in the coming Khariff Season.
In the US the prices have shown an upward trend due to ongoing hot weather and less rainfall in the corn belt. The July delivery the CBOT prices have shown an increase of 8.4% in one week (July 8 to July 15) from $89 perton to $96.55 per ton. For September delivery the rates increased by 9.8%, up from 92.40 per ton to $101.50 per ton. The FOB values correspondingly increased or July to $111 per ton and August to $112 per ton.
For details on corn prices, visit the link below
http://www.grains.org/buying/market_perspectives/mp_07-15-05.pdf
The WASDE report on July 12, 2005 estimates a lower corn production for 2005/06 due to hot weather. The production has been reduced to 274 MMT as against last year production of 299 MMT. The yield has also been reduced to 3.6 tons/acre from last year’s yield of 4.07 tons/acre. The use of corn for ethanol production has been increased from last year’s 33.65 MMT (11.25% of the production) to 38.10 MMT (13.90%) of the production.
The report also predicts 1 MMT of wheat imports for India after a period of 6 years.
For more details on the WASDE report, please visit the link below.
http://www.ers.usda.gov/publications/waobr/view.asp?f=wasde-bb
Controversy on biotech commodities goes to court
A Public Interest Litigation (PIL) has been filed in the Supreme Court against the release of Genetically Modified Seeds and Products in the environment. The PIL seeks a ban on the speedy release of these products.
The PIL also seeks a ban on the import of oil from countries like Argentina, where almost 80% of the soybean crop in GM.
World over, while there is an ongoing debate on the utility of the GM technology, which is a tool to enhance the productivity of the agriculture crops, ensures environment safety and also enhancing human health (less pesticide use) and provides major savings to the farmers, its use in the developed worlds in increasing at a fast pace. 2005 was the year to plant the billionth acre of land with GM seeds in the world.
The Bench has also said that there could be two views on the utility value of the GMO and a debate is on about it.
There are many scientists in India who are working in India as well. While there is work going on in ICRISAT on enhanced Drought Tolerance in Sorghum, Millet, Chickpea, Groundnut and Pigeon pea. Else where work is being done on increase the shelf life of tomato, pest resistance in Brinjal (egg plant) and increase vitamin A in rice.
All the advancements use fine science to fine tune the product for the betterment of mankind.
If you have any queries on the GM technologies and how it effects the farmers and end users, the Council has web videos of different topics which can be reached from the following link.
http://www.grains.org/grains/page.ww?section=Education+Center&name=Web+Video
Please feel free to use the information for the benefir of the community.
Poultry on the rise, efficiency increasing in India
With the new genetic stock available currently in India, the production base in increasing slowly. In 2005-06 the broiler population is expected to reach 1694 million which will produce 1854 TMT of broiler meat. The per capita consumption is expected to increase from 1.56 kg per year in 2004-05 to 1.68 kg per year in 2005-06, but is still very low. The efficiency of production is probably the highest in Coimbatore with average FCR reaching 1.7 (1.7 kg feed to produce 1 kg of live bird). In the north the average FCR is about 1.9 – 2.0.
On the layer front also the farmers in the southern areas, particularly are much ahead than their north counterparts. The average hen housed (HH) egg production is 310 – 315 eggs in 72 weeks of age, while in the north the average production is close to 290 eggs HH.
This is probably one reason of increased expansion in the Namakkal area, which currently has over 20 million birds in production in a 50 km radius producing 15 million eggs per day. By 2006 the birds in production are expected to increase to 25 million.
If you need more information on related topics please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Saturday, July 09, 2005
Agriculture production in India scaled down; Maize prices again scale up in India; Scope of increased use of biofuels up
Agriculture production in India scaled down
The latest reports from Ministry of Agriculture further reiterate the fact, Agriculture production is going down and not up. The fourth estimates for agriculture production released on July 08, 2005 indicate a dismal situation. The total food grain production of the country from July 2004 – June 2005 has been lowered to 204.61 MMT against the 3rd estimates of 210.44 MMT and 225.10 MMT of target fixed.
The production estimates of various food grains like wheat, rice, coarse cereals, and pulses have all been lowered. In case of coarse cereals, the production is estimates at 33.92 MMT as against 34.28 MMT in the 3rd estimate and 38.12 MMT reported for last year (2003-04), loss of about 11% over year. The target for coarse cereals was fixed at 36.80 MMT for the year 2004-05 and the second production estimates were to 31.88 MMT.
On maize the target was fixed at 15.08 MMT for 2004-05 and the second production estimates were lowered to 13.58 MMT. The industry estimates the total production of maize at 12.2 – 12.6 MMT while several of the government departments still stick by the figure of 15 MMT for 2004-05.
On wheat a similar situation has arisen. The target was fixed at 79.50 MMT for the year 2004-05 and the second production estimates put the production level at 73.3 MMT. In the fourth estimates the production has been brought down to 72 MMT for the year 2004-05, which is lower than the last year estimates of 72.11 MMT. The trade and industry estimates the production of wheat at around 70 MMT for the year 2004-05.
The big questions are, which figures are correct? Who has his ears to the ground, government or the industry? How are these estimates made?
Maize prices again scale up in India
While the departments may indicate a high production of maize in India, the prices indicate another story. Some price indications are
Yellow: Rs.5700 ($131) per MT at the Market yard
Local: Rs.6170 ($142) per MT at the Market yard
Red: Rs.6655 ($153) per MT at Market yard
The future prices have also shown an upward trend. Some indicative prices are as under:
July – Rs.5635 ($130) per MT, Aug Rs.5715 ($131) per MT. Prices for October are lower to Rs.5530 ($137) while for Dec are again up to Rs.5700 ($131)per MT. The spot prices in Nizamabad are reported at Rs.5665 ($130).
If the production is so high (15 MMT as targeted) and demand has been put at 13.19 MMT and exports have been lower than last year, there should be surplus. Only surplus has been reported in Karnataka as it did get a bumper crop, but in all other states the production was much lower than anticipated and the area covered was also much less. Due to lower rains the production was effected.
The seed industry estimates the area coverage to be at 6.3 Million hectares and at an average production of 1.95 tons / hac the production is estimated at 12.28 MMT (a simple calculation). If the production is estimated at 15 MMT (as targeted) and the productivity estimated at 1.95 tons per hac, the area coverage is 7.69 million hac. The questions, Was so much area covered under maize?. To plant 7.69 million hectares, was the seed available or sold in the market?
The increased prices and availability issues affect the profitability of the projects using maize as a major ingredient – poultry and starch industry. With such high costs of inputs, it becomes difficult for the industry to be competitive in the world market. While India can be a supplier of good quality poultry meat and value added products to many destinations, the increased cost of production does not give Indian products any advantage. There have been discussions with Japan to supply chicken as India is free of bird flu. The big question will be Indian’s competitiveness in the world market due to surges in ingredient prices.
Scope of increased use of biofuels up
With the price of crude touching $62 per barrel in the world markets, more and more countries will be looking at use of biofuels to lower than dependence on foreign oil.
In the recent tour of Europe, the U S Grains Council (USGC) and National Corn Growers Association (NCGA) leaders were able to have an insight on the EU biofuels policy. The EU has set a goal to have 2 percent of their transportation fuel be biofuel by the end of 2005. By 2010, the EU hopes biofuels will represent 5.75 percent of their transportation fuel.
With the inflation going up in India to 4.14% due to increased petrol and diesel prices, GOI will need to scale up its commitment to use biofuels in the Indian transport sector. Due to the increase in diesel prices the vegetable prices have increased by 7% in the week of review. Other commodity prices will also increases, putting the burden on the common man.
If you need more information on topics related to biotechnology, ethanol and food safety please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
The latest reports from Ministry of Agriculture further reiterate the fact, Agriculture production is going down and not up. The fourth estimates for agriculture production released on July 08, 2005 indicate a dismal situation. The total food grain production of the country from July 2004 – June 2005 has been lowered to 204.61 MMT against the 3rd estimates of 210.44 MMT and 225.10 MMT of target fixed.
The production estimates of various food grains like wheat, rice, coarse cereals, and pulses have all been lowered. In case of coarse cereals, the production is estimates at 33.92 MMT as against 34.28 MMT in the 3rd estimate and 38.12 MMT reported for last year (2003-04), loss of about 11% over year. The target for coarse cereals was fixed at 36.80 MMT for the year 2004-05 and the second production estimates were to 31.88 MMT.
On maize the target was fixed at 15.08 MMT for 2004-05 and the second production estimates were lowered to 13.58 MMT. The industry estimates the total production of maize at 12.2 – 12.6 MMT while several of the government departments still stick by the figure of 15 MMT for 2004-05.
On wheat a similar situation has arisen. The target was fixed at 79.50 MMT for the year 2004-05 and the second production estimates put the production level at 73.3 MMT. In the fourth estimates the production has been brought down to 72 MMT for the year 2004-05, which is lower than the last year estimates of 72.11 MMT. The trade and industry estimates the production of wheat at around 70 MMT for the year 2004-05.
The big questions are, which figures are correct? Who has his ears to the ground, government or the industry? How are these estimates made?
Maize prices again scale up in India
While the departments may indicate a high production of maize in India, the prices indicate another story. Some price indications are
Yellow: Rs.5700 ($131) per MT at the Market yard
Local: Rs.6170 ($142) per MT at the Market yard
Red: Rs.6655 ($153) per MT at Market yard
The future prices have also shown an upward trend. Some indicative prices are as under:
July – Rs.5635 ($130) per MT, Aug Rs.5715 ($131) per MT. Prices for October are lower to Rs.5530 ($137) while for Dec are again up to Rs.5700 ($131)per MT. The spot prices in Nizamabad are reported at Rs.5665 ($130).
If the production is so high (15 MMT as targeted) and demand has been put at 13.19 MMT and exports have been lower than last year, there should be surplus. Only surplus has been reported in Karnataka as it did get a bumper crop, but in all other states the production was much lower than anticipated and the area covered was also much less. Due to lower rains the production was effected.
The seed industry estimates the area coverage to be at 6.3 Million hectares and at an average production of 1.95 tons / hac the production is estimated at 12.28 MMT (a simple calculation). If the production is estimated at 15 MMT (as targeted) and the productivity estimated at 1.95 tons per hac, the area coverage is 7.69 million hac. The questions, Was so much area covered under maize?. To plant 7.69 million hectares, was the seed available or sold in the market?
The increased prices and availability issues affect the profitability of the projects using maize as a major ingredient – poultry and starch industry. With such high costs of inputs, it becomes difficult for the industry to be competitive in the world market. While India can be a supplier of good quality poultry meat and value added products to many destinations, the increased cost of production does not give Indian products any advantage. There have been discussions with Japan to supply chicken as India is free of bird flu. The big question will be Indian’s competitiveness in the world market due to surges in ingredient prices.
Scope of increased use of biofuels up
With the price of crude touching $62 per barrel in the world markets, more and more countries will be looking at use of biofuels to lower than dependence on foreign oil.
In the recent tour of Europe, the U S Grains Council (USGC) and National Corn Growers Association (NCGA) leaders were able to have an insight on the EU biofuels policy. The EU has set a goal to have 2 percent of their transportation fuel be biofuel by the end of 2005. By 2010, the EU hopes biofuels will represent 5.75 percent of their transportation fuel.
With the inflation going up in India to 4.14% due to increased petrol and diesel prices, GOI will need to scale up its commitment to use biofuels in the Indian transport sector. Due to the increase in diesel prices the vegetable prices have increased by 7% in the week of review. Other commodity prices will also increases, putting the burden on the common man.
If you need more information on topics related to biotechnology, ethanol and food safety please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Saturday, July 02, 2005
Corn prices stable ; World coarse grain crop prospects better; High crude oil prices: When will be the time for India to produce ethanol
Corn prices are stable on good monsoon start
Good monsoon sentiments have stabilized the corn prices in India. Though little late the monsoon has covered almost all parts of the country. As per the Indian Meteorological Department (IMD) the deficiency which was 49% on Jun 22, now is only 20%. Due to the delayed rains the sowing though has been affected, but is expected to cover up in the next few days. Reports from Ministry of Agriculture state that the as on June 20 the total area under coarse cereals is only 0.84 million hectares as compared to 1.398 million hectares last year during the same time. The area under corn was only 55% of last year (0.495 mil hac as compared to 0.9 mil hac last year). Bajra was probably the worst affected and was covered only 14% as compared to last year. Jowar (Sorghum) coverage was the highest and covered 114% over last year. With more rains forecast and many parts of the country experiencing flash floods also (Gujarat and Himachal Pradesh), it could be a dicey situation.
All coarse grain prices have stabilized, but are higher than the normal prices this time of the year, partly due to increased demand and lower availability. The Pearl Millet (Bajra) prices are ranging from $124 to $141 per MT for different varieties. The highest price was quoted in Maharashtra at $146 per MT.
Sorghum (Jowar) prices ranged from $158 to $201 per MT and the highest prices was quoted in Rajasthan at $230 per MT for yellow sorghum.
Corn prices ranged from $120 to $139 per MT. The highest prices was quoted in Gujarat at $157 per MT.
Looking at the above prices, the poultry end users are the worst effected. Buying corn from Bihar and transporting it all the way to Gujarat or other parts of the country costs more money. The price of corn imported into India (without duty) at the port will be little higher than the domestic corn prices.
The future prices of corn in India have also gone up. July maize was quoted at Rs.5645 ($129.7) per MT, while August was quoted at Rs.5710 ($131.26). The September corn was quoted at Rs.5695 ($140) per MT.
In the US the CBOT closed lower for July and August than last week. July and August corn were quoted at $2.165 per bushel ($85.23 per MT) and $2.255 per bushel ($88.77 per MT) respectively. The FOB value (US Gulf) were also down to $93 and $95.5 per MT respectively. With the freight cost also low, it just might be feasible to get some corn into India to ease the situation, it the government so desires.
With the plantings almost over in US, it is estimated that 81.6 million hectares of land is under corn, and the biotech plantings are at about 52% of this, about 5% higher than last year.
The detailed Market report from US Grains Council can be found at the following link.
http://www.grains.org/buying/market_perspectives/mp_07-01-05.pdf
World coarse grain crop prospects better in 2005-06 (inputs from worldgrain.com)
According to the International Grains Council, a large coarse grain crop is forecast in 2005-06, at 962 million tonnes, which is short of last year’s record of 1.011 billion.
In its latest report the council has revised the outlook of maize crop and has shown an improvement in Mexico and Argentina. The forecast for barley has been reduced in Australia and EU.
The Council said world coarse grains consumption should fall only modestly in 2005-06, to 963 tonnes, which would broadly match forecast output and compares with 2004-05 consumption of an estimated 964 million.
If production and consumption forecasts are realized, world coarse grains carryover stocks would virtually remain unchanged, at 176 million tonnes versus 177 million in 2004-05, but much higher than 2003-04 stocks of 135 MMT. Stocks of maize are set to increase by 5 MMT while that of barley are set to decrease.
Maize production is expected to decline by around 5% from last year’s record to 673.7 million tonnes, based on reduced yields in the U.S. and smaller crops in the E.U. and the Commonwealth of Independent States. However, the total is somewhat higher than forecast a month ago, with estimates lifted for Argentina and Mexico.
World maize consumption is expected to be close to last year’s level, with U.S. use underpinned by fast-rising ethanol output, and a fall in the E.U. balanced by increases in China and Brazil.
For wheat, global production is forecast at around 604 million tonnes, unchanged from the Council’s estimate a month ago. The Council trimmed forecasts for Australia, Canada and India and increased them for Russia, Ukraine and China. While GOI has maintained a production of 72 MMT, some trade circles are of the opinion that the production of wheat is close to 66 MMT, which will make India grain deficit to a large extent. Even if the production of 70 MMT is considered as estimated by some other, the shortfall of over 2 MMT is forecast due to higher requirements.
Though rains have given respite to Australia, it could not prevent area reduction, while recent rains in Argentina have prevented further deterioration in wheat crop prospects.
World wheat consumption in 2005-06 is estimated at 608 million tonnes, about 4 MMT below 2004-05 due to lower feed use, it is set to exceed production.
High crude oil prices: When will be the time to think about ethanol from Corn in India
Crude oil prices touched over $60 per barrel and slowly eased to $50 last week. Trade believes the high price is there to stay. The increased oil prices forced an increase in petrol and diesel prices in India. With price hikes, there is a new interest in Corn-based Fuels. Will it be possible to insulate ourselves from these price increases?
Getting your car filled up is a painful experience all over the world and energy is needed to move about. Those who will have the insulation of not being dependent on outside world for energy will rule the world. There are almost 4 Million vehicles in the US which cal run on E85 – a blend of 85% ethanol and 15% gasoline (Petrol). And almost all cars can run on a normal gasoline blend of 10% ethanol and 90% gasoline.
With the new technology it is now possible to turn corn ethanol into bio diesel as well. The new technology will substantially increase the supply of the fuels, ethanol and bio diesel and will add a revenue stream which will increase the economics of the ethanol plant. Few plants are already using the technology and more will start using it. As per the reports, a new plant will be coming up in US by next year which will produce 190 million liters of bio diesel per year.
Currently there are 85 plants in US producing 14.44 billion liters of ethanol per year. Another 15 are being constructed. Most corn producing states like Iowa, Nebraska have experienced better returns to corn producers due to the growing ethanol industry.
With the new technology, the market for two alternative fuels, ethanol and bio diesel have merged, which will be beneficial to the consumer as well as the farmer, and will further reduce the burden on the country. “The use of these alternative fuels will help the environment and make US less dependent on foreign Oil”, says an industry expert.
The Ministry of Petroleum and Natural Gas, Government of India has plans to set up a separate Department of energy, which will source energy for India. It is time for Government of India to realize the potential of grains to produce alternative fuels. Currently under grains only Sorghum (Jowar) can be used to produce ethanol in India. If corn can be allowed to be used to produce ethanol and bio-diesel it can give a big boost to the farming community as well provide the source of energy at a much cheaper rate.
There are myths surrounding the production of ethanol from corn. The production of ethanol does not translate into less grain available for food, since farmers do not grow more or less corn based on ethanol production.
Ethanol production uses field corn—most of which is fed to livestock, not humans. In fact, only the starch portion of the corn kernel is used to produce ethanol. The vitamins, minerals, proteins and fiber are converted to other products including sweeteners, corn oil and high-value livestock feed—feed which helps livestock producers add to the overall food supply.
A January 2005 study by LECG, a global consulting company found that the ethanol industry powered the US economy by creating more than 147,000 jobs, mostly in rural areas. The industry boosted U.S. household income by $4.4 billion and eliminated the need to import 143.3 million barrels of oil, a saving of $7.16 billions based on a price of $50 per barrel. Even if India can start ethanol production in a small way, there are a lot of people who will benefit apart from the environment.
For more information on ethanol production and systems, please visit the National Corn Growers Website or click on the link below
http://www.ncga.com/ethanol/main/index.htm
If you need more information, please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Good monsoon sentiments have stabilized the corn prices in India. Though little late the monsoon has covered almost all parts of the country. As per the Indian Meteorological Department (IMD) the deficiency which was 49% on Jun 22, now is only 20%. Due to the delayed rains the sowing though has been affected, but is expected to cover up in the next few days. Reports from Ministry of Agriculture state that the as on June 20 the total area under coarse cereals is only 0.84 million hectares as compared to 1.398 million hectares last year during the same time. The area under corn was only 55% of last year (0.495 mil hac as compared to 0.9 mil hac last year). Bajra was probably the worst affected and was covered only 14% as compared to last year. Jowar (Sorghum) coverage was the highest and covered 114% over last year. With more rains forecast and many parts of the country experiencing flash floods also (Gujarat and Himachal Pradesh), it could be a dicey situation.
All coarse grain prices have stabilized, but are higher than the normal prices this time of the year, partly due to increased demand and lower availability. The Pearl Millet (Bajra) prices are ranging from $124 to $141 per MT for different varieties. The highest price was quoted in Maharashtra at $146 per MT.
Sorghum (Jowar) prices ranged from $158 to $201 per MT and the highest prices was quoted in Rajasthan at $230 per MT for yellow sorghum.
Corn prices ranged from $120 to $139 per MT. The highest prices was quoted in Gujarat at $157 per MT.
Looking at the above prices, the poultry end users are the worst effected. Buying corn from Bihar and transporting it all the way to Gujarat or other parts of the country costs more money. The price of corn imported into India (without duty) at the port will be little higher than the domestic corn prices.
The future prices of corn in India have also gone up. July maize was quoted at Rs.5645 ($129.7) per MT, while August was quoted at Rs.5710 ($131.26). The September corn was quoted at Rs.5695 ($140) per MT.
In the US the CBOT closed lower for July and August than last week. July and August corn were quoted at $2.165 per bushel ($85.23 per MT) and $2.255 per bushel ($88.77 per MT) respectively. The FOB value (US Gulf) were also down to $93 and $95.5 per MT respectively. With the freight cost also low, it just might be feasible to get some corn into India to ease the situation, it the government so desires.
With the plantings almost over in US, it is estimated that 81.6 million hectares of land is under corn, and the biotech plantings are at about 52% of this, about 5% higher than last year.
The detailed Market report from US Grains Council can be found at the following link.
http://www.grains.org/buying/market_perspectives/mp_07-01-05.pdf
World coarse grain crop prospects better in 2005-06 (inputs from worldgrain.com)
According to the International Grains Council, a large coarse grain crop is forecast in 2005-06, at 962 million tonnes, which is short of last year’s record of 1.011 billion.
In its latest report the council has revised the outlook of maize crop and has shown an improvement in Mexico and Argentina. The forecast for barley has been reduced in Australia and EU.
The Council said world coarse grains consumption should fall only modestly in 2005-06, to 963 tonnes, which would broadly match forecast output and compares with 2004-05 consumption of an estimated 964 million.
If production and consumption forecasts are realized, world coarse grains carryover stocks would virtually remain unchanged, at 176 million tonnes versus 177 million in 2004-05, but much higher than 2003-04 stocks of 135 MMT. Stocks of maize are set to increase by 5 MMT while that of barley are set to decrease.
Maize production is expected to decline by around 5% from last year’s record to 673.7 million tonnes, based on reduced yields in the U.S. and smaller crops in the E.U. and the Commonwealth of Independent States. However, the total is somewhat higher than forecast a month ago, with estimates lifted for Argentina and Mexico.
World maize consumption is expected to be close to last year’s level, with U.S. use underpinned by fast-rising ethanol output, and a fall in the E.U. balanced by increases in China and Brazil.
For wheat, global production is forecast at around 604 million tonnes, unchanged from the Council’s estimate a month ago. The Council trimmed forecasts for Australia, Canada and India and increased them for Russia, Ukraine and China. While GOI has maintained a production of 72 MMT, some trade circles are of the opinion that the production of wheat is close to 66 MMT, which will make India grain deficit to a large extent. Even if the production of 70 MMT is considered as estimated by some other, the shortfall of over 2 MMT is forecast due to higher requirements.
Though rains have given respite to Australia, it could not prevent area reduction, while recent rains in Argentina have prevented further deterioration in wheat crop prospects.
World wheat consumption in 2005-06 is estimated at 608 million tonnes, about 4 MMT below 2004-05 due to lower feed use, it is set to exceed production.
High crude oil prices: When will be the time to think about ethanol from Corn in India
Crude oil prices touched over $60 per barrel and slowly eased to $50 last week. Trade believes the high price is there to stay. The increased oil prices forced an increase in petrol and diesel prices in India. With price hikes, there is a new interest in Corn-based Fuels. Will it be possible to insulate ourselves from these price increases?
Getting your car filled up is a painful experience all over the world and energy is needed to move about. Those who will have the insulation of not being dependent on outside world for energy will rule the world. There are almost 4 Million vehicles in the US which cal run on E85 – a blend of 85% ethanol and 15% gasoline (Petrol). And almost all cars can run on a normal gasoline blend of 10% ethanol and 90% gasoline.
With the new technology it is now possible to turn corn ethanol into bio diesel as well. The new technology will substantially increase the supply of the fuels, ethanol and bio diesel and will add a revenue stream which will increase the economics of the ethanol plant. Few plants are already using the technology and more will start using it. As per the reports, a new plant will be coming up in US by next year which will produce 190 million liters of bio diesel per year.
Currently there are 85 plants in US producing 14.44 billion liters of ethanol per year. Another 15 are being constructed. Most corn producing states like Iowa, Nebraska have experienced better returns to corn producers due to the growing ethanol industry.
With the new technology, the market for two alternative fuels, ethanol and bio diesel have merged, which will be beneficial to the consumer as well as the farmer, and will further reduce the burden on the country. “The use of these alternative fuels will help the environment and make US less dependent on foreign Oil”, says an industry expert.
The Ministry of Petroleum and Natural Gas, Government of India has plans to set up a separate Department of energy, which will source energy for India. It is time for Government of India to realize the potential of grains to produce alternative fuels. Currently under grains only Sorghum (Jowar) can be used to produce ethanol in India. If corn can be allowed to be used to produce ethanol and bio-diesel it can give a big boost to the farming community as well provide the source of energy at a much cheaper rate.
There are myths surrounding the production of ethanol from corn. The production of ethanol does not translate into less grain available for food, since farmers do not grow more or less corn based on ethanol production.
Ethanol production uses field corn—most of which is fed to livestock, not humans. In fact, only the starch portion of the corn kernel is used to produce ethanol. The vitamins, minerals, proteins and fiber are converted to other products including sweeteners, corn oil and high-value livestock feed—feed which helps livestock producers add to the overall food supply.
A January 2005 study by LECG, a global consulting company found that the ethanol industry powered the US economy by creating more than 147,000 jobs, mostly in rural areas. The industry boosted U.S. household income by $4.4 billion and eliminated the need to import 143.3 million barrels of oil, a saving of $7.16 billions based on a price of $50 per barrel. Even if India can start ethanol production in a small way, there are a lot of people who will benefit apart from the environment.
For more information on ethanol production and systems, please visit the National Corn Growers Website or click on the link below
http://www.ncga.com/ethanol/main/index.htm
If you need more information, please feel free to contact me.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
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