Maize prices move up
With reports of a lower Rabi maize, the prices of the commodity, the main raw material for the poultry feed to provide energy have moved up. While last week the average price was Rs.5700 ($128) per MT, the week has ended with an average price of Rs.5874 ($132. Prices across the board for all varieties in all states have gone up. Yellow maize sold at Rs.6540 ($147), up from Rs.5830 ($131) last week, while the Red variety sold for Rs.6500 ($146), up from last weeks Rs.6000 ($135). Prices in Uttar Pradesh notched to Rs.6850 ($154) per MT at the market yard.
It must been seen that on the above prices the end users must pay 15-18% for packaging, loading, unloading and transport (depending on destination) and on top of this bank interest and ware housing charges if the stock is to be stored for longer periods.
Some end users have indicated that due to buying pressure in the production areas, their average purchase price has gone up to Rs.5600 ($126) from Rs.5000 ($112) last year during the same period, an upswing of Rs.600 per ton (12%) in one year
As there are concerns about the availability, the concerns about prices and bottom lines are rising. The average annual requirement of maize in the country is 13.73 MMT (1.14 MMT per month) and with production now anticipated to be around 11.75 – 12 MMT, a deficit of 0.14 MMT per month is seen (1.68 MMT in a year).
Another reason for the short supply can be the move from wheat to corn as the markets witnessed lower supplies. Movement towards maize as staple food in some of the states is a possibility as wheat supplies were reduced.
With demand of maize in poultry sector growing at 6.3% per annum, much more than the production growth (average agri growth 2.3% as estimated by GOI), poultry sector must be ready for difficult times ahead. It is likely that the availability of the basic raw material will affect the growth of the sector and small farmers who will not be able to cope up with the rise in maize prices will close farms.
Other sector likely to be affected is the industrial sector, which produces starch, used in pharmaceuticals, textile, paper, and food sector to name a few. Other products manufactured by the sector include sorbitol, dextrose, maltose etc, which has varied uses in the pharma and food business.
In order to make wheat available to the states of Karnataka and Kerala, the State Trading Corporation took out a tender on Friday, Feb 10, 2006 for imports of 500,000 MT of wheat. As per the reports available, Wheat is likely to be imported at Mangalore, Cochin, Tuticorin, Chennai and Vishakhapatman. Reports also indicate that the ports are gearing up for these imports that are likely to happen between March – May 2006.
U S Department of Agriculture came out with the WASDE report on Feb 09, 2006, which indicates lower year end stocks as compared to last month. This is mainly due to increased domestic use, especially for ethanol, which is estimated at 40.65 MMT, up from last month estimates of 40 MMT. The average prices to the farmer is expected to be $68.88 - $80.68 per ton, down from $95.25 per ton in 2003/04 and $ 81.08 for the year 2004/05.
The detailed report can be found at
http://www.ers.usda.gov/Publications/waobr/view.asp?f=wasde-bb
The prices in US for the week ended (Feb 10, 2006) at $87.06 per ton, while the FOB rate (US Gulf) was $108 per ton.
WTO biotech ruling in favour of US
The World Trade Organization (WTO) has upheld the US challenge to European Union’s (EU) ban/moratorium on agricultural crops derived from biotechnology. Preliminary ruling reported that the moratorium is not based on scientific lines. The United States, Argentina and Canada in the joint challenge, had asserted the moratorium violates international trade rules and undermines the development and use of biotechnology. The challenge also argued that the ban is not based on scientific evidence and maintained that biotech crops are as safe to health and the environment as other crops.
The final decision will be out only in mid-2006 and EU is likely to file an appeal against the ruling.
In the last decade since the biotech crops were commercialized, EU was a buyer of US corn, valued at approximately $300 million every year till 1998, when the moratorium was put in place. In addition, 10 new countries which joined EU in 2004 have since stopped buying US Corn.
There is also a fear among EU states that there will be huge compensation claims from the American biotech industry, as the preliminary ruling suggested that member states had illegally banned imports of genetically modified food.
Prof. Dr. Marc Van Montagus, who also produced the first GM plant in Europe, is convinced that technology transfer and plant biotechnology research could revolutionise both agriculture and the food industry. In a press conference in Brussels, he said, “Europe is lagging behind its worldwide competitors and European farmers are deprived of access to one of the fastest growing technologies in agriculture,"
The U.N. Food and Agriculture Organization (FAO) and World Health Organization (WHO) also have said there are no greater risks associated with biotech-derived foods than with conventional plants and foods.
The ruling also found inconsistencies within the European regulatory system and by not allowing its approval system to operate, the EU has imposed undue delays on biotech approvals, resulting in extensive delays and preventing the marketing of many crops grown in the United States.
In October 2005, an E Journal, The Promise of Biotechnology was launched by U S Department of State. The journal can be assessed and downloaded from the following link.
http://usinfo.state.gov/journals/ites/1005/ijee/ijee1005.htm
In another development the American Dietetic Association (ADA) has recognized the important role biotech crops play in modern agriculture. In a statement released, it notes that “agricultural and food biotechnology techniques can enhance the quality, safety, nutritional value, and variety of food available for human consumption and increase the efficiency of food production, food processing, food distribution, and environmental and waste management.” The ADA went on to call for the government, food manufacturers, food commodity groups as well as qualified food and nutrition professionals educate consumers about Ag biotech and encourage availability in the marketplace.
Ban on meat imports extended in India
Through an express notification, GOI has extended the ban on meat and livestock product imports from those countries which have reported cases of Avian Influenza. In a section of the press it has been reported – INDIA BANS MEAT IMPORTS, which could create a panic in the minds of the consumers.
Discussions with officials has indicated that the new notification is only an extension of the old one and imports from those countries which do not have Avian Influenza are allowed.
India has not reported any cases of Avian Influenza and Department of Animal Husbandry is following up with the state forest departments on the status on the migratory birds.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Feb 11, 2006
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