Prices of Essential Commodities and imports; Biotechnology and dead sheep

Prices of Essential Commodities and imports

The prices of essential commodities like Wheat and Pulses has sky-rocketed in the last few weeks. Despite GOI’s assurance of a good wheat crop, the prices have not come down. Retail prices of wheat in some areas are as under;

Delhi – Rs.11 – 12 per kg
Bombay – Rs.15 per kg
Hyderabad – Rs.18 per kg

The average price from these three major cities is Rs.15 per kg, where as the Minimum Support Price (MSP) offered to the farmers is Rs.6.40 per kg. The prices to the consumer are 134% above the MSP. In the wake of the price increase GOI imported 0.5 MMT of wheat in the first week of June and tendered for import of another 3.5 MMT. Lat week GOI allowed imports of wheat by private end users also under the same norms as State Trading Corporation (STC), without any Duty. As per reports available, Food Corporation of India (FCI) has been able to procure only 9 MMT of wheat, against 17 MMT it procured last year.

In the world market, the wheat stocks are expected to be lowest since 1981-82, thus putting pressure on supply and increasing prices.

The rates of pulses also is very high and GOI has allowed the import of pulses and sugar as well under duty free norms.

With lower rains being forecast and high demand of pulses, sugar, and wheat, it unlikely that GOI will have a chance to stop these imports in near future and India is likely to be a net importer to wheat in times to come.

With regard to corn, the prices are also high and few of the areas where production is lower or non existent, but the demand is high are suffering due to non availability of corn. Such areas include Gujarat, Maharashtra and northern parts of India. Yellow corn this week traded at an average price of $137 per MT, which last week was $128 per MT and increase of about $9 per MT.

Discussions with farmers in Punjab, who had grown corn this season (Rabi) has revealed that they have sold corn at a price of Rs.7000 per ton, but as they grow only a small quantity, they are not able to cater to the demand. In most of the areas, where rain fed agriculture is practiced, farmers are not is a position to replace seeds and end up using the grain saved as seed, which reduces the production of corn. In some areas Bihar crop was available at Rs.Rs.5600 delivered, but with high moisture content, and the grains were not fit for storage. Even during transit, heavy losses due to spoilage were seen.

The price of corn is similar to last year on an average at the Mandi levels ($129 – 130 per MT), but the prices at the end user point are higher due high freight rates (due to hike in prices of Diesel and also changes in the loading of trucks, which has been fixed at 9 MT).

Pearl Millet prices dropped from $185 MT in the week ending Jun 17 to $176 per MT this week, a drop of 4.8%, but the prices are still higher than last years price of $143 per MT.

Barley prices have been consistently coming down and this week averaged $152 per MT at the Markets. Last year during the same period the prices were $144 per MT.

Grain Sorghum prices came down by about $22.4 per MT to $153 per MT, due to higher arrivals in Maharashtra. Prices in Rajasthan though were higher at $234 per MT.

With other grain prices including wheat much higher than corn and likely to stay that way, it will not be feasible for the poultry industry to switch to other coarse cereals. Even in the world market, wheat use for feed is likely to decline, due to higher wheat price world over, putting pressure on corn.

In the US the price of Corn on CBOT for July delivery was lower than last weeks close of $92.5 per MT and ended at $89.83 per MT. December corn closed at $99.97 per MT.

Biotechnology and dead sheep

Over the last one week, several reports have appeared in the section of the press linking death of several sheep in Warangal District of Andhra Pradesh after feeding on Bt Cotton stubble in the area. While the NGO’s against the technology are crying hoarse to ban the cultivation of the Bt Cotton, the Genetic Engineering Approval Committee (GEAC) has found inconclusive evidence linking death of sheep to Bt Cotton.

All biotech products are released by GEAC after thorough evaluation of the biosafety data, which also includes feeding studies on cows, goat, fish and mice. In this instance the reports indicate no toxic effects of Cry1Ac on lactating cows, goats, fish and mice.

Reports from ISAAA indicates that feeding studies on mice show that an intake of 4300 mg Cry1Ac/kg body weight had no ill effects on the mice. Studies on goats also show that in order to have an intake of 4300 mg of Cry1Ac/Kg of body weight, a 15 kg goat should eat 24,339 kg of leaf/50,300 kg of boll rind, which is not feasible.

While India at this point needs a second green revolution to feed its burgeoning population and also make way for better profits for the farmers, those against the technology it seems do not want the farmers to prosper. Honourable President, Shri.A P J Abdul Kalam and Prime Minister Shri.Manmohan Singh are keen on the technological advancements in agriculture, and only biotechnology can help India feed its millions. The father of Green Revolution in India, Dr.Norman Bourlaugh has also indicated that the technology can help developing nations, much more, specially countries like India and continent of Africa where there is poverty and starvation.

In the current scenario, in hot summer months of June and July, when vegetable prices are high, it just might be possible to produce tomatos, brinjals and okra which can withstand heat, using biotechnology. Both, the farmers and consumers can benefit from the use of the technology and provide nutritious food throughout the year.

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

Jun 24, 2006