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