Maize Prices are high, but stable
Corn prices have remained stable for 2 weeks now, with delivered prices close to Rs.8000 – 8200 per MT range average. In some areas delivered prices are as high as Rs.9000 per MT. The prices are higher than last year by 15% over last year at this time of the year. There has been speculation in the market and reports suggested that GOI will ban exports of maize from India, but this has not happened. The end users are keenly watching the situation and hoping for a relief from the Government by way of ban on exports on a short term.
Pearl Millet (Bajra) prices from the first week of Nov 2006 have increased from Rs.6600 per MT to Rs.7950 per MT at the market yard, an increase of 20.4%. The prices are also higher than maize (at market yard) by 20%. Under normal circumstances the prices of pearl millet during the harvest would be lower than maize, but not this time. In the last 2 months, it has been only one week (last week of Oct 2006), when the price of Pearl Millet was lower than maize.
Prices of Sorghum on the other size has been showing a downward trend, which average prices currently at Rs.7600 per MT at the Market Yard. The prices are still higher that the maize prices at the market yard by 16%%.
Barley prices have shown the highest increase in these last two weeks and have increased to Rs.8000 per MT from Rs.6900 per MT at the market yard, an increase of 16%. Last week the prices were at a high of Rs.8600 per MT at the market yard. The prices during the last year were at the range of Rs.8600 per Mt level at the market yard.
Before the Thanksgiving Holiday, the CBOT closed higher at $142.72 [per MT) for Dec delivery. The March 2007 delivery was higher at $148.86 per MT. After the holiday the market closed higher with Dec delivery at $145.32 per MT and March delivery at $152 per MT. This is unprecedented increase.
Tighter grain supplies, high prices forecast for 2006-07
The International Grain Council (IGC), has forecast a wheat production of 587 MMT in 2006-07, lower by almost 31 MMT over 2005-06. The Corn production is forecast at 688 MMT, down by almost 5 MMT over 2005-06. The consumption of corn as per IGC is expected to be 721 MMT, higher than 2005-06 estimates of 700 MMT.
IGC also reports that the corn carry over stocks in US in 2006-07 are expected to be 23.8 MMT, which is less than half from last year’s 50.1 MMT.
This is the second year in the row that the world grain production will be lower, while consumption will be up, signalling tighter supplies and higher prices for 2006-07.
Chinese government has finally confirmed that they have issued export permits for 4 MMT of corn from Nov 2006 to Feb 2007, but there have been reports that the 1 MMT corn export slated for Nov – DEC 2006 is delayed. Speculation on exports from China, have also increased the local prices in China. In Argentina, the permits for new crop export registrations are on hold, as the government audits the registrations and wishes to introduce a higher export tax.
Increased cost of production of eggs and broilers – effects profits of farmers
As the delivered price of maize have increased to levels beyond Rs.9000.00 per MT, the price of feed which constitutes 55 – 60 percent maize, have also gone up, thus signalling the increase in cost of production of eggs and broilers.
When maize was delivered to the feed mills and farms at Rs.6000 per MT, the feed prices were in the range Rs.9000-9500 per MT and the cost of production of live broilers ranged from Rs.25 per kg in South India to Rs.29 per kg in North India.
With the price of maize at Rs.9000 – 9300 per MT at several locations, the feed prices have reached Rs.13000 – 13500 per MT, and the cost of production of live broilers is up to Rs.33 per kg in South and Rs.38 in North India. The market prices though have not gone up so much, thus effecting the profit margins of the farmers.
The cost of production of eggs which used to be average at Rs.1.11 each at times when price of maize was Rs.6000 per MT, has now gone up to Rs.1.41 each at these times.
While some state governments like Maharashtra have increased the sale price of milk by Rs.1.00 per kg (to the consumer) due to increase is price of feed, it is not possible to increase the price of broiler. Egg prices in the markets have shown an increase.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Nov 25, 2006
Saturday, November 25, 2006
Saturday, November 11, 2006
Maize Prices shoot up in India; USGC Poultry Team back in India
Maize Prices shoot up in India
This week prices of maize on an average were Rs.7890 per MT delivered, but certain markets hovered at over Rs.9000 per ton mark (delivered). The increase in prices has created a chaos in the market and affected all end users.
Gujarat Rs.9140, Rajasthan Rs.9440, Karnataka Rs.7780, TN and AP Rs.7340, UP Rs.8280 (All prices approximate delivered at the feed mill, starch mills on per ton basis).
The major reason attributed to the increased price is the rise in demand from Poultry and increased demand from South East Asia due to high US prices. There are reports of demands from Malaysia and Sri Lanka which a few Indian traders are trying to fulfil at the cost of Indian end users (poultry and starch sector).
At the end of October the average prices at the market yard were Rs.6000 per MT and with the current price Rs.6575 per MT, this is an increase 9.5% in 2 weeks, which is high. The average price is higher than last year by 12.1%.
Even in production centres like Karnataka and Andhra Pradesh the prices have increased to a level making it unaffordable for the end users.
Market Yard prices in some areas are as under Karnataka Rs.6500 per MT, Madhya Pradesh Rs.6850 per MT, Rajashtan Rs.7860 per MT.
In Tamilnadu the prices at the market yard increased from Rs.5700 per Mt to Rs.6030 this week and increase of 5.8%, Maharashtra Rs.6030 per MT to Rs.6350 per MT, an increase of 5.3%, Gujarat Rs.7225 per Mt to Rs.7630 per MT, increase of 5.6%. The maximum increase was in Andhra Pradesh, where the prices have gone up from Rs.5475 per MT to Rs.6120 per MT, an increase of 11.8% and all this in one week.
With prices of other ingredients (alternate) like Sorghum and Pearl Millet also high, poultry sector is finding it difficult to fed the birds for production of meat or eggs. Over the last few years there were instances wherein poultry sector has used rice cutting to cover the energy in feeds, but with its availability also poor (demand high for food purposes), it is becoming impossible to feed the birds.
US prices ended a little higher than last week at $135 per MT for December deliveries. The prices were up within the week. Looking at these prices the CNF prices (Indian port) will be close to $205 per MT (Rs.9430 per MT)
This may not be the best time to import maize into India and there is no price parity, but in order to give a choice, Government of India would need to ease restrictions on imports and remove the duty of 15% on import of maize and review the quota mechanism, which will give access to the end users to fulfil their requirements from the world market as and when required. With imports allowed without duty, the market sentiment would help in reducing the prices.
USGC Poultry Team back in India
The 8 member poultry team sponsored by USGC to tour the US Poultry sector to study the marketing and packaging trends, returned this week after meeting with the key people in US poultry industry. The team met with USDA officials in Washington. In North West Arkansas, the team was in the hometown of Tyson and Walmart and visited the corporate offices of the Poultry and Retail bigwigs.
Based on the discussions the team had with the best in the field, the team was able to put a time line on India’s position against US. Indian poultry is at a point where the US sector was in 1972. Though it will not take 34 years to reach where the US sector is today, the Indian poultry sector will need to embrace innovations and invest in the retail infrastructure to sell more.
Another major learning was the fact that the majority of the chicken sold in the market, parts or value added was chilled with the average shelf life of over 12 days. In India the shelf life provided is about 3 days on chilled product. The major difference is in the chilling process wherein the product is deep chilled and is distributed at O deg C in US. In India the product is chilled at 4 deg C and the temperature during distribution and sale is up at 6 deg C, which is detrimental to the shelf life of chicken.
The team also studied the various packing models and systems which are used by the companies and which help the consumers to identify the product and are convenient as well.
The team would be working together to put out the set of observations and recommendations for the Industry, academics and the government which will help the sector to grow faster.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Nov 11, 2006
This week prices of maize on an average were Rs.7890 per MT delivered, but certain markets hovered at over Rs.9000 per ton mark (delivered). The increase in prices has created a chaos in the market and affected all end users.
Gujarat Rs.9140, Rajasthan Rs.9440, Karnataka Rs.7780, TN and AP Rs.7340, UP Rs.8280 (All prices approximate delivered at the feed mill, starch mills on per ton basis).
The major reason attributed to the increased price is the rise in demand from Poultry and increased demand from South East Asia due to high US prices. There are reports of demands from Malaysia and Sri Lanka which a few Indian traders are trying to fulfil at the cost of Indian end users (poultry and starch sector).
At the end of October the average prices at the market yard were Rs.6000 per MT and with the current price Rs.6575 per MT, this is an increase 9.5% in 2 weeks, which is high. The average price is higher than last year by 12.1%.
Even in production centres like Karnataka and Andhra Pradesh the prices have increased to a level making it unaffordable for the end users.
Market Yard prices in some areas are as under Karnataka Rs.6500 per MT, Madhya Pradesh Rs.6850 per MT, Rajashtan Rs.7860 per MT.
In Tamilnadu the prices at the market yard increased from Rs.5700 per Mt to Rs.6030 this week and increase of 5.8%, Maharashtra Rs.6030 per MT to Rs.6350 per MT, an increase of 5.3%, Gujarat Rs.7225 per Mt to Rs.7630 per MT, increase of 5.6%. The maximum increase was in Andhra Pradesh, where the prices have gone up from Rs.5475 per MT to Rs.6120 per MT, an increase of 11.8% and all this in one week.
With prices of other ingredients (alternate) like Sorghum and Pearl Millet also high, poultry sector is finding it difficult to fed the birds for production of meat or eggs. Over the last few years there were instances wherein poultry sector has used rice cutting to cover the energy in feeds, but with its availability also poor (demand high for food purposes), it is becoming impossible to feed the birds.
US prices ended a little higher than last week at $135 per MT for December deliveries. The prices were up within the week. Looking at these prices the CNF prices (Indian port) will be close to $205 per MT (Rs.9430 per MT)
This may not be the best time to import maize into India and there is no price parity, but in order to give a choice, Government of India would need to ease restrictions on imports and remove the duty of 15% on import of maize and review the quota mechanism, which will give access to the end users to fulfil their requirements from the world market as and when required. With imports allowed without duty, the market sentiment would help in reducing the prices.
USGC Poultry Team back in India
The 8 member poultry team sponsored by USGC to tour the US Poultry sector to study the marketing and packaging trends, returned this week after meeting with the key people in US poultry industry. The team met with USDA officials in Washington. In North West Arkansas, the team was in the hometown of Tyson and Walmart and visited the corporate offices of the Poultry and Retail bigwigs.
Based on the discussions the team had with the best in the field, the team was able to put a time line on India’s position against US. Indian poultry is at a point where the US sector was in 1972. Though it will not take 34 years to reach where the US sector is today, the Indian poultry sector will need to embrace innovations and invest in the retail infrastructure to sell more.
Another major learning was the fact that the majority of the chicken sold in the market, parts or value added was chilled with the average shelf life of over 12 days. In India the shelf life provided is about 3 days on chilled product. The major difference is in the chilling process wherein the product is deep chilled and is distributed at O deg C in US. In India the product is chilled at 4 deg C and the temperature during distribution and sale is up at 6 deg C, which is detrimental to the shelf life of chicken.
The team also studied the various packing models and systems which are used by the companies and which help the consumers to identify the product and are convenient as well.
The team would be working together to put out the set of observations and recommendations for the Industry, academics and the government which will help the sector to grow faster.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Nov 11, 2006
Subscribe to:
Posts (Atom)