Commodity prices moving up in India, no respite in sight
As we enter the third week of the new year, the corn prices moved slightly up. The average prices for the varieties which has started at Rs.5830 ($131) per MT at the start of the week and moved down by mid week to Rs.5700 ($128) per MT, but by the end of the week the prices had touched a new high of Rs.6000 ($135) per MT by the end of the week. In the states the prices also touched an all time high of Rs.6450 ($145) at the market yard and prices moving up in all states including Andhra Pradesh Rs.5340 ($120); Bihar Rs.5785 ($130); Gujarat Rs.6000 ($135); Karnataka Rs.4985 ($112); Madhya Pradesh Rs.5960 ($134); Maharashtra Rs.5785 ($130); Uttar Pradesh 6450 ($145). The average for the week was calculated as Rs.6100 ($137), up Rs.140 ($3) per ton from last weeks Rs.5960 ($134) per MT a gain of 2.3% in one week. The average prices are higher by almost 13.12% over last year’s price of Rs.5385 ($121) during the same period.
The spot prices in Nizamabad were Rs.5530 ($124) per MT while in Davangere the Spot prices were Rs.5330 ($120) per MT.
In US, Corn price at CBOT was $80.77 per MT for March Delivery. The price for May delivery was quoted at $84.70 per MT. Last week March delivery closed at $84.12, while May delivery had closed at $87.86 per MT. FOB value of corn, US gulf was quoted at $101 per MT for Jan, Feb and March deliveries.
Barley prices at the market also are up and average price which was Rs.8230 ($185) per MT at the market yard are up to Rs.8950 ($201) per MT, an increase of 8.6% in 2 weeks. The average price for US barley (FOB, Pacific North West is $108 per MT. In India since there is no varietal purity, it is difficult to get a price for malting barley. In US there is discussion to move up the protein standard in malting barley up to 13.5%. In India in most cases the barley is available at 9.5 – 1.5% protein level. Current price at elevator level in US $124 per MT for the farmer for specific varieties.
The market perspectives for week ending Jan 13, 2006 can be found at
http://www.grains.org/buying/market_perspectives/mp_01-13-06.pdf
WASDE Report predicts high corn and lower barley production in US
The World Agriculture Supply & Demand Estimate report out last week (Jan 12, 2006) has predicted an increased world supply of corn from 677.65 MMT in Dec 2005 to 683.51 MMT. Of the total supply, US will produce almost 41.3% (282.26 MMT) for the year 2005-06. The usage in feed is expected to be up to 152.4 MMT in US from 149.23 MMT. The Food, Seed and Industrial usage is expected to be 75.18 MMT while the use for Ethanol production is expected to be 40 MMT. The crop for the year 2005-06 is expected to be second highest crop after 2004-05 crop and the average productivity is expected to be 3.75 tons/acre. The average price to the farmer is expected to be $69.89 – 80.70 per MT.
In the same report, Barley production is expected to be down to 4.6 MMT which is probably the lowest. The export surplus is expected to be 0.65 MMT. Of the total production 1.5 MMt will be used in Feed, while 3 MMT is expected to be used in Food, Seed and Industrial uses.
China on the other hand is expected to produce 134 MMT of corn (as per Jan estimates). The last estimates (Dec 2005) predicted a production of 130 MMT. China is expected to export 6 MMT of corn and the ending stocks are expected to be 30.26 MMT, about 4 MMT estimated in Dec 2005.
Another report estimates China’s total grain consumption in the 2005-2006 to be a record at 500 MMT. The per head grain consumption will reach 386.5 kilograms and the grain imports will account for 5.1 percent of total grain consumption over the course of the year. The corn consumption is estimated at 128 MMT.
Poultry Farmers in India in dire straits due to increased commodity prices
Poultry farmers, especially layer farmers in Ajmer (Rajasthan), Kashipur (Uttranchal), Gurgaon (Haryana) and all over north India are suffering due to increased maize prices. Many have purchased maize at a price as high at Rs.7500 ($168) per ton (delivered) at their mills and farms and prices are going up and egg prices steadily decreasing. In Dec 2005 the average egg price was Rs.182 per 100 while by Jan 15th the prices had dropped to Rs.145 per 100, a loss of almost 20% in 2 weeks. (The prices are those received by farmers at farm)
Till last year, farmers were using Barja (Pearl Millet) and Jowar (Grain Sorghum) in poultry rations, but with the average prices of these two grains also touching a high of Rs.6719 ($151) per MT and Rs.6897 ($155) per MT, which is much higher than the average corn price of Rs.6100 ($137) per MT, they are unable to use the these grains. Also when India had surplus wheat in its go-down, poultry farmers used wheat in layer rations, but with the prices touching over Rs.10000 ($224) per ton in some markets and Government of India does not have any wheat for poultry use. It will be difficult for the farmers to feed birds in times to come.
Some prices at the poultry farm level (delivered at farm) reveal an interesting trend;
1. Maize prices in Oct 2003 were Rs.5380 ($121) per MT and reached a high of Rs.5750 ($129) per MT in Dec 2003. The prices were highest in Aug 2004 at Rs.6080 ($136.6) per MT when there was no production.
2. In Oct 2004 the maize prices were Rs.5700 ($ 128); new production and by Dec 2004 has reached Rs.5850 ($131) per MT. In August 2005 the prices had reached Rs.6670 ($150) per MT which by Sept 2005 were up to Rs.6980 ($157) per MT.
3. In Oct 2005 the prices of maize were Rs.6550 ($147) per MT for new crop which in Dec 2005 had reached Rs.6850 ($154) per MT.
Prices every year have opened higher than last year in October, when new crop cop comes in and have increased steadily and have reached the highest in September every year when there is no production. The prices in Dec 2005 are close to September 2005 levels, even though new crop arrived in the market. With the current prices so high, one can only guess what will be the prices in April – September 2006.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Jan 21, 2006
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment