Commodity price update; 2005 – A Year of successes for Plant and Animal Biotechnology

Commodity price update

In the second week of the new year, the commodity prices in India were on the rise and it seems the prices will not come down in the near future. For Barley the week started with an average price of Rs.8900 ($200) per MT at the market yard and by the mid week had reached Rs.9211 ($207) per MT at the market yard.

Corn (Maize) average price was Rs.5851 ($131.5) per MT which by mid week had reached Rs.5940 ($133.5) per MT and remained the same till the end of the week. In the second week of January 2004, the average price was Rs.5492 ($123.5) per MT, i.e., the price this week is higher by about 8.3% than last year. The prices in production areas like Bihar and UP are showing an abnormal trend of increasing too fast. Bihar local prices were at a high of Rs.5918 ($133) per MT while prices in UP were at a high of Rs.6360 ($143) per MT and most of the end users in North India were buying corn at a price of Rs.7500 per MT ($168) per MT delivered to there plant sites.

The market prices in Gujarat are touching Rs.6096 ($137) per MT. The end users are receiving maize at Rs.7000 ($157 per MT).

Future prices of corn in India are also reported to be higher at $126 for Jan, $126 for Feb, $131 for Mar and $133 for Apr. Spot prices in Nizamabad were $126 while in Dawangere the prices were reported at $118 per MT.

Corn closed at CBOT at $83.83 per MT a little lower than last weeks close of $84.4 per MT. The FOB value is close to $104 per MT.

In the current scenario, when Indian corn prices are high, it is getting difficult for poultry and starch users to keep up with the prices, but they will have to live with these highs as the prices are likely to remain high till the end of March until the new crops arrives in Bihar and Tamil Nadu. The prices can be expected to go up again in April 2006 and continue to rise until the new crop arrives in Oct 2006.

2005 – A Year of successes for Plant and Animal Biotechnology

The year 2005 was a year of successes when biotechnology completed a decade of commercialization and the billionth acre was planned in the year 2005. The year also saw the mapping of rice and dog genomes and major projects to sequence the genomes of corn, soybean and sheep were announced. In 2005, a major contribution on nutrient enhanced research also came from Bill and Melinda Gates Foundation by way of a $36.8 million grant. The grant will enable focused research on improving nutrition and health through biotech-improved bananas, cassava, rice and sorghum.

As per a release from Biotechnology Industry Organization (BIO), other consumer benefits included:

1. Kellogs announcement of using low-linolenic acid soybean oil to reduce trans fats in several of its products.
2. Development of an improved cress having omega-3 fatty acids which reduce the risk of heart disease.
3. Research continued on edible vaccines with development og biotech potato with Hepatitis B vaccine, a biotech tomato with SARS vaccine.
4. Japanese researchers developed a biotech soybean that contains a product that will promote hair growth and prevent hair loss caused by Chemotherapy.

Over the year International organization continued their support to biotechnology and highlighted the benefits of biotechnology:

• The World Health Organization (WHO) reported that biotech foods can “contribute to enhancing human health and development.” The study found that biotech foods can increase crop yield, food quality, and the diversity of foods which can be grown in a given area, and lead to better health and nutrition, and thereby raise health and living standards.
• A report issued by USDA’s Economic Research Service (ERS) and Rutgers University also found that large farms and small-scale farmers in southern Africa can benefit from planting biotech corn. The report found that yields on large farmers increased about 11 percent, and yields for small farms increased anywhere from seven to 56 percent, when biotech corn was planted.
• A National Center for Food and Agriculture Policy (NCFAP) study found that the 118 million acres of biotech crops U.S. farmers planted in 2004 increased food production by 6.6 billion pounds, and provided $2.3 billion in additional net returns for U.S. growers. Biotech crops also reduced pesticide use by an additional 34 percent, or 15.6 million pounds.
• The British research firm PG Economics Ltd. found that the global use of biotechnology-derived crops has added $27 billion to farm income and greatly reduced agriculture’s negative impacts upon the environment.
• An April, Science published a study by researchers at Rutgers University and the University of California, Davis who found that biotech rice in China could decrease farmer’s production costs, increase harvest yields, reduce the use of pesticides by as much as 80 percent, and improve farmer health. The study also estimated that if “90 percent of the farmers plant [biotech] rice, the annual agricultural income of China will increase by $4 billion.”
• A study by the University of Connecticut and Japan’s Kagoshima Prefectural Cattle Breeding Development Institute found that meat and milk products from cloned cattle are safe for consumption. The results reiterate those found by the National Academy of Science in 2001.

After a decade of commercialization, driven by farmer demand, the growth in biotech crop has continued. In 2005 the growth was 11%, despite the obstacles raised by many NGO’s. As per ISAAA’s report, 250,000 new farmers in four new countries planted biotech crops in 2005. In 1996 the biotech crop area was 4.2 million acres in 6 countries, which in 2005 soared to 222 million acres in 21 countries, an increase of 52 times.

New additions in 2005 included, Iran which, grew its first crop of biotech rice, the first biotech planting of this important food crop globally. The Czech Republic which, planted Bt maize for the first time.

There are now five EU countries growing biotech crops, Spain, Germany, France, Portugal and the Czech Republic. The trend is likely to continue

Of the 21 countries that are planting biotech crops, 14 have the “mega-country” status by planting 125,000 acres of more, as per ISAAA. The countries include United States, Argentina, Brazil, Canada, China, Paraguay, India, South Africa, Uruguay, Australia, Mexico, Romania, the Philippines and Spain.

Of the total biotech area in the world, 55% was in US. In Brazil, the growth was most dramatic, 88% to reach 23 million acres, 10% of the world biotech acerage. India was not far behind with a three fold growth from 1.24 million acres in 2004 to 3.2 million acres in Bt Cotton in 2005, having a share of 1.4% in the world biotech acres.

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

Jan 14, 2006