Commodity prices stable, but availability poor
Last week government of India announced a package for the poultry sector that will provide 0.8 MMT of corn to the small poultry farmers who have been affected by the high corn prices. The Government will supply this corn to the small farmers through Directors of Animal Husbandry in the states and only small farmers will be eligible for this scheme, though no definition of a small farmer has been provided. The price of the corn will be Rs.4500 – Rs.5000 ($98 – 109) per MT. The government will also provide 60,000 tons of Grain Sorghum (Jowar) and 7,000 tons of Pearl Millet (Bajra).
With this announcement the price of corn in the market yards certainly came down a wee bit from Rs.6233 ($135.5) per MT in the week ending June 30 to Rs.6154 ($133.8) per MT in the week ending July 07, 2006. The prices had registered an increase in the last week of June and were up from Rs.5975 ($129.9) to Rs.6233 ($135.5) per MT at the market yard.
On a positive note government seems to have realized that high prices and lower availability of commodities particularly corn is an issue and something needs to be done about this.
Going by the values of imported corn, the prices are similar to local corn (delivered) close to ports area, where the demand is much higher and the supplies low. In the last week of June, the approximate delivered value of local corn was close to Rs.7250 ($157) per MT, especially in Gujarat and imported corn (if purchased in Panamax), could be delivered at Rs.Rs.7350 ($159.7) per MT. This is on the premise that the duty of 15% is not imposed on corn and the commodity will be delivered in bulk to the destinations close to ports.
The average prices of sorghum in the market yard was also up and averaged at Rs.7790 ($169.5) per MT, which is lower from last years price of Rs.8350 ($181.5), during the same period.
Price of Pearl Millet (Bajra) has been coming down steadily and currently it is priced at Rs.6200 ($134.9) per MT at the market yard on the average. Last year the price was Rs.6820 ($148.3) per MT during the same period.
Barley prices on the other hand are showing a rising trend and local prices are close to Rs.7290 ($158.5) per MT, mush higher than last years price of Rs.6545 ($142.3) per MT.
Prices in US for corn slid little lower this week. July delivery closed at $94.85 per MT against 95.64 last week. September delivery closed at $98.79 per MT, little lower than $99.58 per MT for last week. December corn closed at $104.30 per MT.
Biotech Planting and acceptance worldwide
In a recent report relaesed by USDA last week, it is estimated that over 60% of the 79.4 million acres have been planted with biotech traits in the US. The major users of the traits of South and North Dakota with 86% and 83% of area under biotech corn respectively. USDA also estimates that the total acreages this year are down by approximately 3% over last year.
Going by accepatnace level, China for the first time has approved import of 50,000 toms of Biotech corn, which is due to arrive in August 2006. Most analysts believe that China will be be a big importer, but it will be slow process. China has liberaloized the import process and currently private tarders and end users can import corn after receiving the permit, Earier all imports were through the state run COFCO. China has not issued any new export quotas since Feb 2006. Last reports available put the imports for this year at 2.5 MMT, must lower than last year’s 8.1 MMT.
Reports also indicate that Vietnam has also purchased a small consignment of 5000 MT of corn, which will be biotech, as there is no Identity Preservation (IP) system available and there is co-mingling of all the corn planted in US. IP is done only when specified for Value Enhanced Grains, like High Oil Corn (HOC), High Extractable Starch Corn (HESC), Hard Endosperm Corn (HEC) or Non GM Corn and is sold at a premium.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Jul 08, 2006
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