Commodity prices stable, will go up again; Ethanol Yields More Energy and is less polluting; Focus on increasing poultry consumption

Commodity prices stable, will go up again

This week corn started with highs and ended with lows, but there were definitely quality issues. End users in most parts of the country are sceptical about availability of corn on long term basis and planning for large storage. But this would also push up prices for the small end users.

The average price of corn at the start of the week at the market yards across the country was Rs.6100 ($137) per MT, which by the end of the week had come down to Rs.5960 ($134) per MT. The price was definitely higher than last year’s average price of Rs.5362 ($121), an approximate increase of 11.15% over last year.

Bajra (Pearl Millet) prices which were at Rs.6760 ($152) per MT at the start of the week ended at Rs.7210 ($162) per MT, an increase of 6.67% in one week. The prices are higher by Rs.1250 ($28) per MT than corn (21%). Poultry industry would use some pearl millet, if the prices are lower by 20% to cover by the reduced efficiency of the grain, but at a higher price, it is not feasible to use pearl millet in poultry rations.

Jowar (Grain Sorghum), which started the week with a low of Rs.6340 ($142) per MT, had increased to Rs.6740 ($152) per MT by the end of the week, an increase of 6.3% in one week. The last year’s price of sorghum at this time of the year was Rs.6630 ($149) per MT. In Indian Grain sorghum can also be used in poultry rations, but only if the prices 18-20% lower than corn. Currently the prices are Rs.780 ($17.5) per MT, almost 13% higher than corn.

As prices of all commodities are going up, it is becoming increasingly difficult for the grain end users in poultry & starch sector to meet their needs. The output prices are not going up to that extent, which might force some of the small operators to shut shop in times to come.

In US the CBOT on corn closed higher at $86.19 per MT, approximately higher by 6.71% than last week’s close. The FOB price of corn US corn (US Gulf) remained same at $106 per MT.

Last week’s market report can be seen at
http://www.grains.org/galleries/market_perspectives/mp_01-20-06.pdf

Ethanol Yields More Energy and is less polluting (from grainnet)

Yet another study finds ethanol production to have a positive energy balance, meaning it gives more energy that is takes to produce a liter of ethanol. A study conducted by Professors Daniel Kammen, Alex Farrell, and their associates at University of California-Berkeley's Energy and Resources Group and the Goldman School of Public Policy was published on Friday, Jan 2006, also finds that ethanol decreases dangerous greenhouse gas emissions.

According to the results, producing ethanol from corn uses much less petroleum than producing gasoline. The study found that the production and use of ethanol reduces greenhouse gas emission by 15 percent compared to oil and gasoline use.

These findings are consistent with those of the U.S. Department of Energy’s Argonne National Laboratory, which estimates that the use of 10 percent ethanol blends would reduce greenhouse gas emissions by up to 19 percent.

While corn will continue to be the major feedstock for U.S. ethanol production, the development of cellulosic ethanol technology offers a promising compliment and a new era for the U.S. ethanol industry. Currently, 95 ethanol plants have a combined production capacity of more than 4.3 billion gallons (16.2 Billion liters) a year. There are 31 ethanol plants and nine expansions under construction with a combined annual capacity of more than 1.5 billion gallons (5.67 billion liters).

The increased demand of ethanol can also bee seen in the USDA’s reports. 2006 baseline projection report is due out in February 2006, and is expected to highlight a dramatic hike in corn use (for ethanol) with the inclusion of the 7.5 billion gallon (28.39 billion liters) Renewable Fuel Standard in last summer's energy law. The phasing out of the fuel additive methyl tertiary butyl ether (MTBE) has increased demand for ethanol as a gasoline oxygenate. WASDE report of Jan 2006 estimated 40 MMT use of corn for ethanol in the year 2006.

Focus on increasing poultry consumption

The newly formed International Poultry Council (IPC) focused on increasing poultry consumption in the world at the recent International Poultry Exposition (IPE) at Atlanta. In some countries the consumption of poultry meat has declined due to the fear of Avian Influenza.

It also agreed that the members would work together to maintain consumer and customer confidence in poultry products, with other agencies such as the World Health Organization.

The main strategy of IPC is to send a message to consumers that poultry is safe to eat if it is properly handled and cooked. USA Poultry and Egg Export Council (USAPEEC) has placed a large poster on a downtown Atlanta billboard near to the World Congress Center, the IPE site. The poster features a chicken dressed in an apron and it reads: "Poultry's safe. Just cook it." The IPC has endorsed this message (shown above). Not to leave behind eggs, a similar poster has been designed for eggs.

The member countries of the IPC are Argentina, Brazil, Canada, Central America, Chile, China, Egypt, the European Union, Mexico, Peru, Russia, Thailand, Turkey and the USA.

If you have any interest in the IPC charter, please contact and the same can be sent to you.

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

Jan 28, 2006