Commodity prices remain strong; Source of drug resistant bacteria in poultry meat

Commodity prices remain strong

Maize prices are just a tad lower than last week at Rs.6850 per MT, but are similar to last year prices. Average month price for Dec 2007 is Rs.6800 per MT against Rs.6779 per MT in Dec 2006. The production estimates for the Rabi crop are still in preliminary stages, but reports indicate a production of 2.7 – 3.0 MMT as the area under maize has been reported to be up from 0.741 mill hac to 0.978 mill hac, an increase of over 32%, only due to higher prices received by the farmers in the year 2007.

In the spot markets, prices in Nizamabad (Andhra Pradesh), Davangere (Karnataka) were in the range of Rs.6800 – 6900 per MT, while in Ratlam in Madhya Pradesh and Nimbaheda in Rajasthan, prices were close to Rs.8300 per MT, while in Karimnagar (Andhra Pradesh), prices were close to Rs.7000 per MT. In the futures market prices in Jan – Apr 2008 were in the range of Rs.7450 – 7950 per MT, even though a new crop is expected in Mar 2008.

Pearl Millet (Bajra) prices are similar to last week at Rs.6600 per MT, but are lower than last year by about 10%. Against maize the prices are lower by 2.5%. Average month price for Dec 2007 was Rs.6600 per MT against Rs.7365 per MT in Dec 2006.

Sorghum prices have reached RS.10200 per MT at the market yard, about 5% higher than last week prices and 34% higher than last year prices. Against maize the prices are higher by 49%. Average price for the month of Dec 2007 at the market yard was Rs.9670 per MT against Rs.7730 per MT in Dec 2006. The area under rabi sorghum is down slightly from 4.712 mill hac to 4.616 mill hac.

Barley prices reached Rs.10300 per MT, 7% higher than week and 34% higher than last year. Spot prices at Jaipur market were ruling at Rs.12200 per MT (packed). In the futures market, barley prices were Rs.9400 – 9700 per MT for April – July deliveries. Average price for Dec 2007 was Rs.10188 per MT against Rs.7691 per MT for Dec 2006. The area under barley is reported to be up slightly fro, 0.639 mill hac to 0.689 mill hac.

Export of maize continues from India to Taiwan, Malaysia, Korea and other pacific rim countries. There are reports of congestion at some ports as well, which is slowing down exports from India and things will ease out in the next couple of days.

After the wheat fiasco, GOI is in for trouble on Rice front as well and MMTC has come out for a tender to import white Rice. India has been a net exporter of rice and increased requirement, low procurement has led to this situation.

On CBOT, corn prices moved up to $177.94 and $182.35 per MT for Mar and May 2008 deliveries, adding about 2% over last week’s close. Prices are likely to stay form as the crude prices are up and demand for ethanol is going up. Corresponding DDG’s prices are also up.

Source of drug resistant bacteria in poultry meat

While the first source is over use of antibiotics in feed or water to treat infections or their use as growth promoters, there is increasing evidence that humans/workers carrying antibiotic resistant bacteria could be a major cause of its spread among communities as well as on the chicken. In addition humans themselves are to blame for over medicating themselves with antibiotics.

It is important to have a farm to fork approach, as it regulates all the points in the food chain in an attempt to improve safety. A regulation on withdrawal feed (antibiotic free in the last few days prior to slaughter) could be an important factor in the farm to fork policy in addition to using proper bio-security rather than depending on antibiotics. It will reduce the cost of production on one side and also reduce the amount of medication that the chickens and humans are exposed to.

Integrated poultry companies are already following this system of withdrawal feed, but it is the individual farmer who relies more of the market price to sell the stock that needs to be made aware. In a condition where at least 60% of the sector is still with small individual farmers, chicken is sold when the price is right and sometimes when the birds are still on some antibiotics and it is difficult to monitor the supplies, unless there is a law. Countries like Malaysia, Sri Lanka, Vietman all have such laws and it is high time such a law is formulated which will help the industry in the long run.

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

Commodity prices surge in India; Advantage Biotech Maize

Commodity prices surge

Maize prices are slightly up by about 4% reaching Rs.6950 per MT at the market yard this week. The prices are about 3% higher than last year. Reports suggest that over 500,000 MT of maize has been exported from India to Malaysia, Taiwan, Vietnam, Korea, Bangladesh and also to Sri Lanka and there is more to go as price are still conducive for exports.

Pearl Millet prices are up by 3% over last week to Rs.6600 per MT, but are 10% lower than prices last year. Against maize the prices are lower by 4%. Layer farmers are using pearl millet is feeds at about 5% levels to stabilize the feed prices.

Sorghum prices added 13% over last week reaching a level of Rs.9750 per Mt at the market yard. The prices are about 28% higher than last year and about 40% higher than maize.

Barley prices were down by about 8% over last week at Rs.9650 per MT. The prices are about 36% higher than last year. Reports indicate about 300,000 MT of exports of Barley from India.

Prices in US were up slightly over last week to $174.60 per MT at CBOT close on Friday. Indicative FOB US Gulf prices were $206.90 per MT for Jan/Feb 2008 deliveries. Indicative FOB PNW prices were $238 per MT for Feb/Mar 2008 deliveries.

In order to stem the rise in inflation China has chosen to auction 500 TMT of maize on Dec 25, 2007 as per reports available. Earlier auctions of 2 lots of 500,000 made available some quantities of corn into the market and stabilized the prices.

EU is currently reeling under severe feed grain shortage and reports available indicate that the shortage is likely to continue for the next two years. USGC estimates that EU will buy at least 10 MMT of corn and 3.9 MMT of sorghum.

Advantage Biotech maize

In April 2007, a report by PG Economics concluded that using biotech maize not only improves yield and increases the profits of the farmers, but also as biotech maize contains lower levels of myco-toxins, it is better for animal health.

In 2006, about 65,000 hac of Bt Maize was planted in seven EU states and in all the states the maize yield was higher by about 10% against the conventional non biotech varieties. The most significant advantage found was a significant reduction in myco-toxins found in biotech maize.

In early Dec 2007, European Commission has sent out proposals to all states for approval for new Biotech maize varieties. The new varieties are biotech varieties of hybrids that are already approved in EU and need to be authorized for food, feed, imports and processing, but not for cultivation.

EU is also looking to approve a variety of biotech potato, which has higher starch and will be used for industrial purposes only. The by-products from the above two will be allowed to be used in animal feeds.

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

Commodity prices in India stable, prices in US move up; Poultry team from Iraq in India

Commodity Prices in India stable, prices in US move up

Maize prices remained stable across the country at about Rs.6700 per MT and the prices are similar to last year values even though good arrivals were reported at most of the mandis. Expect the prices to stay firm for the next two months at least.

Pearl Millet prices dropped by 4% over last week to Rs.6500 per MT at the mandi (Market Yard). Te prices are lower than last year by 9%, Against maize the prices were reported lower by 3%.

Sorghum prices on an average dropped by 15% over last week dropping to Rs.8600 per MT level at the market yard. The price though is still higher than last year by 16%. Against maize the prices are higher by 30%.

Barley prices moved up slightly by 1.6% to Rs.10500 per MT level at the market yard. The prices were higher than last year by 29%. Though the govt. expects a higher crop this year, the prices are likely to remain higher for the coming season.

Corn on CBOT touched a new high for Dec 07 and March 08 at $ 165.34 and $172 per MT levels. FOB US Gulf values were indicated at $ 204.80 per MT, while FOB PNW were indicated at $235.50 per MT.

DDGS prices have also increased in the midst of increasing corn prices in the US and FOB US Gulf is indicated at $197 per MT for DEC and up to $200 per MT for Jan shipments. Values for DDGS delivered to South China (CNF) in 40 feet containers is indicated at $305 per MT.

As the ingredient prices in India have touched higher levels, specially soybean meal, farmers and feed millers are unable to keep the feed prices under check. While broiler feed was being sold at Rs.14000 per MT, the layer feed is being sold at Rs.9000 – 10000 per MT. Feed constitutes at least 65-70% of the cost of production of broilers or eggs and even a small increase, eventually increases the cost of production of broiler and eggs.

Poultry Team from Iraq in India

A 5 member Iraqi poultry team, sponsored by U s Grains Council visited India this week to study growth of the Indian poultry sector and meet and chalk out a program for the development of poultry industry in Iraq. Since the war the sector has been devastated and needs infusion of technology and training.

The team visited Pune, Namakkal, Erode and Coimbatore in 5 days and travelled to the Indian poultry belts to see broiler breeder operations, layers operations, feed mill, commercial broiler farms and were impressed by the commitment of the farmers and companies alike in getting results, which are at par with the western world. Breeders giving 185 Hatchable eggs, Layers giving 320 eggs (Hen housed), Broiler performance at 1.82 FCR at 2 kg body weight with a liveability of 95 – 97% was most impressive, which is not possible in Iraq at this point, due to lack on technology.

The team was impressed by the infrastructure of training institute, testing labs, that have been created in the country by the industry. In addition the work being done by National Egg Co-ordination Committee on eggs and Broiler Co-ordination Committee on Broilers impressed the team as both the organizations strives to help the farmers get a fair price for their produce and at the same time creating awareness about the eggs and poultry meat amongst the consumers at large.

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

Maize prices stable - despite good arrivals; Grains prices will stay up

Maize prices are stable - despite good arrivals

Maize prices on an average are up by about 1.5% over last week, reaching Rs.6800 per MT level. Prices are lower than last year by about 1.7%. Average prices are much lower in Andhra Pradesh, Karnataka and Maharashtra, which is receiving good arrival of the crop. In the long run, the price may not be expected to go down drastically, due to strong demand in the poultry sector, which is expected to need 8.21 MMT in 2008/09.

Pearl Millet prices stumbled by 3.5% over last week to Rs.6700 per MT, similar to maize and the price is also lower than last year by 11%.

Sorghum prices moved by to Rs.10150 per MT, up by 1.8%, over last week. Against last year, the prices are up by 22.3% and against maize the price is up by 49%.

Barley prices have also moved by 3.4% this week , to Rs.10320 per MT at the market yard. The price is 31% higher than last year. This year high prices have prompted farmers in Uttar Pradesh, Punjab, Haryana and Rajasthan to plant more Barley. The respected crop is 1.61 MMT, higher than last year, but still lower than the target of 2.0 MMT fixed by Ministry of Agriculture, GOI.

Corn prices on CBOT were up over last week, and Dec futures closed at $157.27 per MT, up from last week close of $151.32. Mar 08 futures closed at $164.26 per MT, up from $158.02 of last week. FOB values (US Gulf) also moves up and were indicated at $194 – 195 per MT for Dec 2007 – Feb, 2008.

Grain Prices will stay up

As per a report released by IFPRI, the food production is likely to take a hit and reduce by 16% by 2020, mainly due to climate change. The food prices all over the world have risen and the rise is the most since 1973/74.

Though the harvest of 2007 has been the highest at 2.1 Billion tons of cereals, up by 4.6% over last year as per FAO, the prices have remained higher and average world prices in Nov 2007 were higher due to continued strong demand. The AGFLATION (inflation in agricultural product prices) is the highest at the time when the production is also the highest. Some countries, like Australia, were bit by drought, but higher production in other countries covered the shortfall and produced more.

Two countries, China and India increased the incomes substantially, which made buying food, particularly cereals, pulses and meat more affordable. As demand rose and supply strained, the prices were up.

In China the per capita meat consumption as per a report was 20 kg in 1985, which in 2007 is estimated at 50 kg. As per the report the global GDP is growing at over 4% for the fifth successive year and as the demand of meat is tied to economic growth, that is where most of the cereals are ending – feed for animals.

The increase in prices is also helping farmers getting a better price for the produce and looking at India, the maize farmers are selling their produce at 8% higher price than the Minimum Support Price set by GOI. It is the private trade and end users which is buying all of the stocks and there is no need for the government to intervene.

Amit Sachdev

India Representative

U S Grains Council,

bluecross303@gmail.com

Stable Prices - helps users purchase; Good Genetics and Dairy Growth

Stable prices – helps users purchase

Maize prices in India this week remained stable at RS.6700 per MT range, despite higher deliveries in Karnataka and Andhra Pradesh, clearly showing higher demand is keeping the prices stable. Any let up in demand from poultry sector or starch will bring down the prices. The prices are similar to last year. For the month of Nov 2007, the average price of maize was Rs.6660 per MT against Rs.6600 for Nov 2006, just about 1% higher. The price for Nov 2007 though is higher than Oct 2007 by 1.67%.

Pearl Millet (Bajra) prices were up by 1.3% this week to Rs.7000 per MT at the market yard, but were lower than last year prices at this time of the year by 5.8%. Against maize, the prices were higher by 4.3%. For the month of Nov 2007, the average prices were Rs.6700, about 4.86% higher than Oct 2007, though the prices are lower than Nov 2006 prices by 10.5%.

Sorghum (Jowar) prices were up by 10%, reaching Rs.9960 per MT in the last week of Nov 2007 and were reported 32% higher than last year, during the same period. The prices were also higher than last corn by 49%. Average prices for the month of Nov 2007 were Rs.9540 per MT, 3.4% higher than Oct 2007 and 29% higher than Nov 2006. Against maize, the average prices were up by 30% for Nov 2007.

Barley prices reached Rs.9980 per MT at the market yard, just about 2% lower than last week, but 12% higher than last year. Average prices for Nov 2007 were Rs.10546 per MT, than Nov 2006 prices by 31%, but only 1.3% higher than Oct 2007 prices at the market yard.

Prices in US were up slightly, Dec corn closed at $151.32 per MT, up from $150.38 last week , while Mar delivery closed at $158.02 per MT, up from $156.92 per MT. Deliveries to SEA are being quoted anywhere from $270 – 290 per MT.

Good genetics and Dairy Growth

The Indian dairy industry is at a cross road, while the production of milk is estimated at 100 MMT, the efficiency of production is still much lower (at 1 Ton/animal/year). Two major issues that can slow down the growth of the sector :

1. Genetics: GOI has finalized the protocol for import of semen, embryos and live animals from different countries. But there are still some issues within the protocol that need to be understood and based on the information available, the imported semen will not be cheap, but will certainly be better and the new generation of animals will certainly be more efficient in production.

The guidelines can be found at http://dahd.nic.in/trade/RGIIEX.htm.

And the revised protocol for the import of bovine semen can be found at http://dahd.nic.in/trade/revised%20draft%20notification.doc

2. Feed and Fodder: Lack of fodder and feed will pull down the growth of the sector. As per GOI sources the available fodder can meet the demand of only 46.7 per cent of livestock. It will be important that farmers are made aware of the value of concentrates/Balanced Cattle Feed that can supplement the fodder and straw that is fed by the farmers.

In a country like Kenya, small farmers have been helped by the introduction of genetics and feed and fodder. From 18-20 kg at the 70 day peak in 305 day lactation, using better genetics have lead to 40 kg milk production at the 70 day mark in 305 days lactation. Average lactation of some animals has reached 9000 litres over a 10 month period.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodities stable in India; Cost of production of broiler up in India

Stable Commodity prices in India

Maize

Maize prices averaged Rs.6700 – 6750 per MT at the market yard this week, higher by 2% over last week and 3.5% higher than last year’s price at the market yard. The current delivered prices is ranging from Rs.7100 – 7300 per MT for areas close to production centres and about 7800 – 8000 per MT for areas away from production centres. Spot prices in Nizamabad and Karimnagar are close to Rs.7000 per MT while in Davangiri (Karnataka) the prices are lower at Rs.6600 per MT range. In Rajashthan and Madhya Pradesh markets the Spot values are ranging are close to Rs.8300 per MT, thus affecting the feed prices for poultry farmers in the northern regions. Future prices are ranging from Rs.7450 per MT for Dec and going upto Rs.8000 per MT for Mar 2008, this despite the fact that a small crop will be in the market in Feb/Mar 2008 in Tamil Nadu, Andhra Pradesh and Bihar.

Pearl Millet

Pearl Millet (Bajra) prices have moved up by about 6% this week to reach Rs.6800 – 6900 per Mt levels, but the prices are lower than last year by 10%. Against maize, the prices are higher by 2.3%.

Sorghum

Sorghum (Jowar)are down by 4% compared to last week, reaching Rs.9050 per MT at the market yard. The prices are still higher than last year by 19% and also against maize the prices are higher by 34.5%.

Barley

Barley prices are lower at Rs.10,200 per MT down by 9% over last week, but are higher than last year by 34%. In the coming years, the requirement of malt is going to skyrocket as more and more breweries are planning to come to India and planning to setup breweries. SPOT Price at Jaipur were over Rs.12300 per MT.

US markets closed higher than last week on higher export numbers. Reports indicate that over 55% of USDA’s estimated corn exports have already been done. CBOT closed at $153.14 per MT for Dec and $159.67 per MT for Mar deliveries.

Cost of production of broiler up in India

Increase in corn and soy-meal prices have increased the cost of production of broiler in all regions of the country. While corn in South is reported to be delivered at Rs.7100 – 7300 per MT, in North India the delivered prices are close to Rs.8200 – 8300 per MT. Soy-meal prices have reached Rs.15,600 per MT delivered at almost all locations. Based on a corn soya ration with 55-58% corn and 30% soy-meal, the feed price are close to Rs.13,500 – 13,700 per MT, up from Rs.12,000 per MT last year, when soy-meal prices were much lower. The prices of feed in the last 45 – 60 days have increased by about 8% (over Rs.1000 per MT) at some locations, only due to increase in soy-meal prices.

The cost of production of broilers (live) is ranging from Rs.35.5 per kg for integrators to Rs.41 per kg for farmers in North India, who are buying chicks. One of the major reasons for a high cost of production in North is high mortality as well.

The cost of production is likely to go up further in North India in the winter months as heating costs (heating of sheds for brooding) will be added on the costs.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity Markets Stable; DDG's - a valuable source of protein & energy; Hygiene standards for Indian Street Food

Commodity markets stable

Due to good rains in Khariff season and better prospects in Rabi crops has raised the estimates for agriculture growth to over 4% in 2007/08. As the Minimum Support Prices (MSP) of wheat has been increased, there are expectations that farmers will grow more wheat (75.5 MMT) and sell it to government at the higher price.

Maize

For the past two weeks the maize prices at the market yard have been stable at Rs.6600 – 6650 per MT and higher than the MSP offered by GOI of Rs.6200 per MT. The prices are similar to last year prices. There are strong indications of export of maize to SEA region and reports indicate FOB (India port) prices of USD 220 – 230 (Rs.8690/9085) per MT or CNF values of USD 240 – 245 (Rs.9480 – 9677) per MT. Markets are experiencing higher arrivals after the festival season, which is keeping the prices stable despite higher demand by poultry/starch and exporters.

Pearl Millet (Bajra)

The prices have remained stable for last two weeks at Rs.6500 per MT and this week are down by 18% over last year. Against maize prices, Pearl Millet is trading at 2% lower values.

Sorghum (Jowar)

This week sorghum prices are down by 3% over last week to Rs.9450 per MT, but are still higher than last year by almost 27%. There have been some queries for export of Sorghum, but due to poor availability and high prices, it will be difficult to export sorghum from India. Prices are also higher than maize by 43%.

Barley

Prices have short up to Rs.11000 per MT at the market yard. Availability is poor due to higher exports. Prices are over 30% higher than last year prices. Market reports indicate an increase in malt demand by brewery industry as the growth is estimated at 15-20% and this growth is likely to continue for the next couple of years.

USDA in its last report dated Nov 09, 2007 has reduced the maize production in US from 338.29 MMT to 334.48 MMT due to lower anticipated yields. The average price to the US farmer though has been increased from USD 114.16 – 137.78 per MT to USD 125.97 – 149.59 per MT.

The maize prices on CBOT were down for Dec / Mar deliveries at $149.36 and $156.05 per MT against last week’s $156.26 and $159.05, down by 4.4% and 1.88% respectively.

Dried Distiller’s Grains with Soluble – a valuable source of protein and energy

New reports indicate that the energy value of DDG’s is close to 3000 Kcal/kg (through fat) and the protein value is about 27 – 28% and fibre is about 5.8 – 6%. Though the product is low in Lysine, it can be used in layer, dairy, swine, and broiler rations without any problems and lysine can be added. On a recent visit to some of the dairy farms in USA, the DDG’s was being used at 5% levels in milking and dry animal rations. Current prices are about 95% of corn values, and this is likely to remain as the corn prices are going up and demand is also soaring.

There are still some issues that might need to dealt with – like flow-ability – which experts tell is not a problem if the product is cooled for at least 24 -36 hrs before dispatch. In addition, making pellets of DDG’s prior to dispatch will solve the problem of handling and flow-ability to a great extent. Work is being done at Northern Crop Institute, Fargo, North Dakota, under Dr.Kim Koch to pellet DDG’s. On the product consistency, It is recommended that buyers should source the material from one / two ethanol plants so as the product is consistent. As the new technology of fractionalization comes online and other plants start using the same, the product will be more consistent.

Hygiene standards for street food in India

Indian love to eat out – specially on the streets, be in tangy traditional North Indian ethnic foods or omelette's, boiled eggs in winter or meat soups in winter or other dishes year round, which may or may not contain meat. Ministry of Food Processing Industries along with Ministry of Health is working on hygiene standards for street food, wherein the vendors will need to have special carts which will have surfaces that could be cleaned, water for cleaning the utensils (or use throw away) and also have some systems to keep the cold food cold like meats etc and hot food hot.

The question still remains on the sourcing of food. If the food raw material like mat including chicken etc is not sourced from a certified supplier, keeping it in clean environment is not going to do much good as the bacterial contamination at the point of slaughter or delivery would be enough to make the product unsuitable for consumption. It is important that the ministry looks at the complete package to make street food more safer and making it mandatory for vendors to source food raw material like meat etc from certified suppliers.

The implementation of the integrated food law is one step in this direction and it would be beneficial for companies to sponsor such street food carts.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Grain Markets in Turmoil

Grain markets in turmoil

Maize prices are 2.3% over last week reaching Rs.6600 – 6650 range at the market yard. The prices are also 8.3% higher than last year in the last week of October 2006. Possible reasons of the increases in prices is export consolidation and bad weather in parts of Tamil nadu and Andhra Pradesh holding deliveries. Average Oct 2007 price was Rs.6549 at the market yard, about 8.77% higher than Oct 2006 prices. though the prices are lower than Sept 2007 average price by 4.92%.

Pearl Millet (Bajra) prices for end of Oct 2007 reached Rs.6166 per MT at the market yard, about 4.1% lower than last week. Prices are also lower than last year by 6.7%. As against maize the prives are lower by 7%, but pearl millet is not being included in poultry rations, as the differential is not higher. Average Oct 2007 price was Rs.6385, down by 2.10% over Sept 2007 price. Average price is also lower than Sept 2007 price by 2.57%.

Sorghum (Jowar) prices are lower than last week values by 1.7% at Rs.9535 per MT, but are 21.2% higher than last year. Against maize, the prices are 44% higher . Average sorghum prices for Oct 2007 was Rs.9218, about 1.13% lower than Sept 2007 prices, But higher by 31% over Oct 2006 prices on an average. Against Maize, the average price is 29% higher.

Barley prices dipped by 7.3% over last week, to reach Rs.10200 per MT at the market yard. The prices are about 48% higher than last year. Average prices for Oct 2007 was Rs.10400, higher by 34% over Oct 2006 and 11.6% higher than Sept 2007.

GOI has estimated the production of maize in India at 13.03 MMT for Oct 2007 against 11.48 MMT for Oct 2006 harvest and 3.0 MMT for Fed/March 2008 against 3.55 MMT for Feb/March 2007. The total production is estimated at 16.03 MMT for 2007 against 14.98 MMT for 2006. With the wheat MSP increased to Rs.10,000 per MT, many analysts believe that the land under maize in Bihar and Uttar Pradesh and Madhya Pradesh may go down and shift to Maize. In addition high prices of wheat in the local market will force many a subsistence farmers to consume maize as food and not sell the same to procure wheat from the open market, thus reducing the market surplus.

The total demand of maize for all sectors including poultry, starch, livestock, brewery, exports etc is estimated at 15.93 MMT, any reduction in Rabi (Feb/March 2008) harvest, increase in human consumption and higher exports could trigger an unusual increase in prices of Maize in India.

Corn prices on CBOT moved up due to high energy values. Corn on CBOT for Dec 07 and March 08 closed at $148.42 and $155.31 per MT respectively, up by $2 – 2.26 per MT. Corn harvest is 73% complete and almost 84% of soybean has been harvested in the US.

DDG’s prices are going up again and if indications are correct it will be close to $290 – 300 per MT for CNF India for Jan – Feb deliveries. At these prices, it is little lower than Soy-meal, which is currently selling at $375 per MT delivered at some of the destinations.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Indian Coarse Grain Prices Remain Volatile; US Prices are high

Indian Coarse Grain Prices are Volatile

Maize prices by week ending Oct 27, 2007 reached Rs.6400 - 6500 per MT at the market yard and have been at this value for 2 weeks now. The prices are higher than last year (OCt 2006) prices by about 8%. even with the higher crop. The increased prices are due to higher local/domestic demand and also due to export demand to South East Asian market, specially Malaysia, Vietman and other countries.

Pearl Millet (Bajra) prices are stable between s.6200 - 6400 per MT range by end of Oct 27, 2007 and were higher than last year prices by 10%. Against maize, the prices are lower by just 1%.

Sorghum prices have moved up by over 11% in one week to end at Rs.9700 per MT after reaching a low of Rs.8700 per MT a week before. Prices are higher than 50% over last year and against maize prices are higher by 49%. There are some export querrie for sorghum as well, but at these prices it just may not be feasible to export sorghum.

Barley prices reached Rs.11000 per MT at the market yard and have been going up steadily. Prices are about 38% higher than last year. GOI has fixed a target of 2 MMT of barley for Rabi season, up fro, a production of 1.31 MMT last year. Thebig question though is will the farmers move from wheat to barley as the Minimum Support Price for wheat is higher a Rs.10000 per MT.

Prices in US are high

Fueled by high crude oil prices and increase in ethanol prices from $1.40 per gallon to $1.75 per gallon (on CBOT), corn prices in last 2 weeks have added $7.27 per MT to the rally for Dec delivery (up from $139.18 to $146.45) and $8.26 per MT for Mar 08 delivery (up from $144.78 to $153.04 per MT on CBOT).

FOB US Gulf values for Nov / Dec deliveries were $179.5 per MT and from Pacific North West (PNW) were $196.85 and $198.40 per MT respectevely.

About 60% of corn crop is estimated to be harvested and the harvest is lilkely to proceed faster as the winter fast approaches.

Based on the curret prices of other commodities, Informa Economics have estimated land coverage for next's years crop in US.

They have predicted that U.S. acreage planted to major crops would be as under:

Corn acreage: 85.8 million acres down 7.9 million acres from this year.
Soybean acreage: 71.7 million acres up 8 million acres from this year.
W heat acreage: 63.7 million acres up 3.3 million acres from this year.

This is mainly due to higher soy and wheat prices in the world market

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity prices remain volatile; Higher US Corn crop predicted

Commodity prices remain volatile

Maize prices were down by about 3.4% over last week reaching Rs.6400 - 6500 per MT level at the market yard, with lowest prices in Karnataka and there is speculation that GOI agencies will intervene to start the procurement of Maize in Karnataka. The Minimum Support Price (MSP) has been fixed at Rs.6200 per MT. The prices though on an average are higher than last year by 7.8%. There are reports that farmers have grown large quantities of while maize in Gujarat, Maharashtra and also some parts of Karnataka and will be used for human consumption.

Pearl Millet (Bajra) prices were down by 10.8% on large quantity of arrivals in the market yard. The prices are down to Rs.6100 per MT. As against last year the prices are lower by 1%. Against maize the prices are lower by 4.8%.

Sorghum (Jowar) prices have shot up by 8% over last week, reaching Rs.9400 per MT at the market yard at a time crop crop is being harvested. Last year during the same time (2nd week of October) the prices had slumped. As against last year the prices are higher by 37% and against maize prices are higher by 43%.

Barley prices are down by 6% over last week to at about Rs.10000 per MT. The prices are running higher than last year by 32%. GOI has announced the new Minimum Support Price for barley at Rs.6500 per MT and increase of 15%, which may believe will make farmers plant more barley this season so as the availability is better in April 2008. India is reeling under a severe shortage of barley this time of the year.

On CBOT, corn prices are slightly up over last week to $138.18 for Dec delivery and $144.71 for Mar delivery.

Higher US Corn crop predicted

New report from USDA released on Oct 12, 2007 predicts a yet another increase in corn crop. New estimates indicate a production of 338.27 MMT, which is 26.42% higher than 2006/07 production of 267.57 MMT. The ending stocks for the 2007/08 are projected to be high at 50.72 MMT. One of the major reasons for the increase in ending stocks in higher supplies and lower end use (as compared to last report) specially by the ethanol sector, down from 83.82 MMT to 81.28 MMT. The use in Food, Seed and Industrial sector is down from 119.126 MMT to 116.58 MMT as per the latest report. The Domestic Feed and Residual use is down from 148.59 MMT to 144.78 MMT. Due to lower supply of grain in the world the exports have been projected higher at 59.69 MMT by USDA.

In India there is lot of speculation about large maize exports due to higher production, but due to the appreciated Rupee, it just may not be feasible to export maize or barley on a long term basis and India will able to fill the gap on a short term basis.

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

Mixed Reaction on Commodities in India; Feed Grain Shortage in EU and Short corn crop in China; What can biotech do for the consumer?

Mixed reaction on Commodities in India

Maize prices in India are lower than last week by about 1% at the market yard, reaching Rs.6700 per MT. The prices are still higher than last year by 11.5%, when in the first week of Oct the prices were Rs.6010 per MT at the market yard. Some arrivals have started in Karnataka and Nizamabad and there are reports of some consolidation on export of maize from India to South East Asia, quality concerns with the buyers are a major issue.

Pearl Millet (Bajra) prices have risen by about 7.4% over last week to Rs.6900 per MT. The prices are also higher than last year by 1.8% and against maize the prices are higher by 3%. Even though new crop has started to arrive, prices are going upward.

Sorghum (Jowar) prices have slumped by 9% over last week to Rs.8700 per MT. Against last year the prices are high by 22% and against maize the prices are higher by 30%.

Barley prices have shot through the roof and are up again this week by another 6.4% reaching over Rs.10500 per MT at the market yard. The prices are higher than last year by over 46% and the availability is getting tight day by day. Some of the buyers are of the view that FOB value at Kandla Rs.13,500 ($337) per MT is also feasible as the prices in other parts of the world are much higher. Until last week, US feed barley was offered at $350 (FOB, PNW), if that is any indication. In the long run, will Indian malting companies be able to get any barley from India or import at a higher price will be the only option.

Corn prices of CBOT softened and Dec corn dropped to $134.71 per MT, down from $146.84 per MT of last week close, lower by 8.26%. March corn also closed lower by 7.75% to 141.33 per MT.

The new report from Informa estimates the production of corn in US at 343 MMT against USDA estimate of 338 MMT.

Feed Grain Shortage in EU and short corn crop in China

USGC assessments indicate that there is likely to be a severe feed grain shortage in EU in coming years due to natural calamities and increasing demand. EU is currently buying Sorghum for feeding its livestock. For the year 2007/08 this could be as high as at 3-4 MMT for whole of EU.

USGC report from China indicate a corn crop of 139 MMT, about 6.5 MMT lower than last year's crop of 145.5 MMT. Though government figures indicate a crop of 149 MMT. Other private agencies have estimated a crop at 135 MMT, much lower than USGC estimates.

What can biotech do for the consumer?

While there have been discussions related to benefits of the technology for the farmers in the development world, Indian farmers have accepted the technology and more and more farmers are using the technology produce more and live a better life. They are also helping the environment and themselves by using less pesticides. But in all this there is also talk that the technology is only for the farmers and not for the consumers. As we move forward, there are products that are in the market or will be in the market soon that will be much safer, thanks to biotechnology.

Not only is biotechnology being used to produce more food, the technology is being used to produce better, healthier, more nutritious and tasting and safe food for the human race.
New products that are likely to be on the shelves soon include:

Golden Rice, fortified with beta-carotene that stimulates the production of vitamin A in the human body. Specially for those children who suffer from Night Blindness and often lose sight early in life.

A tomato with three times more beneficial lycopene than conventional varieties. Lycopene protects human tissue and could help prevent breast and prostate cancers as well as heart disease.

New cooking oils made from canola, corn and soybeans that contain up to 10 times more healthful vitamin E. Researchers believe vitamin E can lower the risk of cardiovascular disease and some cancers.

Plant based vaccines, made from crops such as banana or potato — which are then pulverized and administered in pill form. Researchers have developed a vaccine for hepatitis B that is similar to a traditional vaccine but can be produced by a banana for a fraction of the cost.

Food with fewer allergens. Researchers are working to reduce the allergens in rice, wheat, peanuts so as more people can enjoy these foods

There are organization which have attested to the safety of foods developed using biotechnology:

The American College of Nutrition "supports the use of biotechnology to develop food crops that contribute to global food security and enhance the safety and nutritional value of the food supply."

The American Medical Association, which recognized the "many potential benefits offered by genetically modified crops and foods … and encourages ongoing research developments in food biotechnology."

The international Society of Toxicology says "there is no reason to suppose that the process of food production through biotechnology leads to risks of a different nature than those … created by conventional breeding."

The General Accounting Office, the investigative arm of the U.S. Congress — says "biotechnology experts believe that the current regimen of tests has been adequate for ensuring that GM foods marketed to consumers are as safe as conventional foods."

The World Health Organization, which said "the benefits of biotechnology are many," including improved production and reduced pesticide use, and promise "major improvements in both food quality and nutrition."

Themajor concern most people have is that biotechnology has a potential to introduce allergens into the food supply, reports indicate that the technology will help reduce allergens in foods and reduce allergic reactions, which effect more than 50 million people worldwide.

(with inputs from whybiotech.com)

Amit Sachdev
Indian Representative
U S Grains Council
E Mail: bluecross303@gmail.com

Lower commodity prices in India; World prices and demand

Lower Commodity prices in India, Higher in other parts of the world

Maize prices slipped a bit (1.3%) over last week to settle at Rs.6750 per MT. The prices are however higher by 4.1% over last year at the same time. For the month of Sept 07, the average prices are Rs.6870 per MT at market yard and are higher than Sept 06 average by 2.16%. The prices though are lower than Aug 07 prices by 7.3%.

Pearl Millet (Bajra) prices have also slumped this week by 7%, settling at Rs.6500 per MT. The prices are higher by 4.2% over last week. Against maize the prices are lower by 4.7%. For the month of Sept 07, the average price was Rs.6520 per MT. Prices are higher by 0.76% over Sept 06 prices, however prices are down by 3% over Aug 07 prices.

Sorghum (Jowar) prices are down by 5.7% over last week, settling at Rs.9367 per MT. The prices are however higher than last year by 31.3%. In the last week of Sept, the prices are higher than maize by approximately 42%. Average prices in Sept 07 were Rs.9322 per MT at the market yard, and the prices are higher than Sept 06 prices by about 20%. Prices are also lower than Aug 07 prices by 0.67%.

Barley prices have moved up over the last week by 2.6% to Rs.9965 per MT. Oct future prices on NCDEX were being quoted at Rs.12060 per MT. The prices are higher than last year 36.7%. Average prices in Sept 07 was Rs.9330 per MT, which is higher than Aug 07 prices by 19.4%. In addition the prices are also higher than Sept 06 by 27.8%.

It may be noted that the new crop will be available only in March/April 2008 and with world supplies dwindling fast, the prices in the world market are also likely to stay higher.

On CBOT, corn was trading at $146.84 and $153.21 for Dec 07 and Mar 08 delivery respectively, which is little lower than last week’s Dec delivery prices.

World prices and demand

The U.S. Department of Agriculture (USDA) reported on Sept. 28 that maize stocks in the United States, as of Sept. 1, totalled 33.02 MMT, down 34% compared to a year ago. The USDA’s quarterly grain stocks report also showed soybean stocks up 27% and wheat stocks down 2% from a year ago.

Due to increase in demand, the commodity prices are much higher than last year. As per a report, in 2007, the prices of Illinois corn and soybeans are up 40% and 75%, respectively, from a year ago (2006). Kansas wheat is up 70% or more. Some analysts also believe that next year probably there will be less corn as more farmers will grow wheat and the prices are historically highest.

New estimates also indicate that the crop is China could be lower by over 8 MMT. With increased demand within China and possibly imports in China and negligible exports from China, prices in the region can also be higher .

In India, the corn is grown in Khariff (same time as in US, harvest in Oct), but the competitive crop will be Rice in irrigated areas. There is speculation that the Minimum Support Price (MSP) will be increased by another Rs.1,000 per MT, there is likely hood that there will be a shift. For Rabi (harvest in Feb/mar), there is all likely hood that farmers in Bihar and Uttar Pradesh will sow wheat as the MSP has already much higher than maize at Rs.10000 per MT.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity prices rise; China Corn Market; Biotech and food security

Commodity prices rise

Maize prices are similar to last week at Rs.6800 per MT at market yard, but the prices are higher than last year by 5.2%. Prices in Karnataka have declined considerably at Rs.6300 per MT, lower than last week's Rs.7100 per MT, due to arrivals of the new crop in certain markets. The first estimates for the 2007-08 khariff crop have been declared by GOI and the estimates project a production of maize at 13.07 MMT from 7.617 million Hac, with an average productivity of 1.71 tons/hac. This would be a new record after 2006 khariff's dismal production of 11.43 MMT. Now that maize export are also not canalized (Notification was until Sept 5, 2007), there are reports of export commitments to neighbouring countries, primarily on the freight advantage. In the US about 14% of the corn crop has been harvested and the prices and on CBOT, corn closed at $148.22 for December delivery, higher by about $10 per MT over last week. FOB (US Gulf) rates were quoted at $ 176 - 177 per MT for Oct - Dec deliveries.

Pearl Millet (Bajra) prices have gained 10% over last week reaching Rs.6900 - 7000 per MT levels. The prices are about 7% higher than last year and against maize the prices are higher by 1%. The first estimates project a production of 7.97 MMT against a target of 8.5 MMT. The production estimates are lower than last years estimate of 8.63 MMT.

Sorghum (Jowar) prices gained about 22% over last week reaching Rs.10,200 per MT on the average. The prices are about 29% higher than last year. Against maize the prices are higher by 48%. The first estimates project the production of sorghum at 3.60 MMT in Khariff against the target of 4.20 MMT, The estimated production is lower than 2006 khariff estimates of 3.68 MMT. There are export queries for sorghum as well as there is interest from Europe and Africa to purchase the crop. US sorghum is being exported to Europe and Italy and also by Japan and Mexico. Sorghum is being quoted at $226.95 for Oct-Dec delivery (FOB US Gulf).

Barley prices have shot up by another 4.5% this week, reaching record levels of Rs.9700 per MT at the market yards. Delivered prices are about Rs.11,500- 12,000 per MT at the malting plants. Prices are higher than last year by 56%, which is a record. Reports indicate that about 100 - 150 TMT of barley has been exported to Saudi Arabia. Barley is a Rabi crop and will be planted in Nov 2007 to be harvested in Feb/Mar 2008 to be used in 2008-09 year. GOI has fixed the target for Barley at 2.0 MMT, up from last year's (2006-07) production on 1.31 MMT, against a target of 1.65 MMT. This is an increase of about 52% in the target over last year's production. In US the barley harvest is over and export commitments as per a report are about 115% higher than the estimate. Prices are quoted at $365 per MT (FOB PNW) for feed barley.

China corn market

China's feed demand is likely to rise by over 10% in 2008/09 as per a report from China Feed Industry Association. basically due to higher consumption by hog (Pork) sector and also the poultry sector. This increased demand is likely to keep the commodity prices higher in China. With China’s major soybean and corn growing regions currently hit by serious droughts, lower Chinese production means the country has to import more to meet rising demand, industry players have said.

In a move to keep the demand of corn down and prices stable, China has decided to suspend all approvals for the industrial corn processing units for the next 3 years. As per a report from National Development and Reform Commission (NDRC), the next approvals will start only after 2010. The ban on “deep processing” of corn - involving the transformation of corn into industrial products like ethanol - comes amid concerns in China about the security of the food supply and the inflationary impact of bio-fuels which use grains as feedstock.

In the 10th Five-year between 2001-2005, annual growth of corn consumption by the industrial sector was 14 %, against an annual growth of 4.2 % in corn supply. Over the next three years, consumption of corn by industrial sector will be limited to to only 26 % of China's total corn consumption. China corn output in 2010 is expected to be 150 MMT, up 3.5% from the 2006 levels of 145 MMT, while the demand is likely to exceed 150 MMT.

Biotech and food security

An International Biotechnology Conference was organized by Federation of Indian Chamber of Commerce and Industries (FICCI) in collaboration with US Department of Agriculture (USDA) and Indian Council of Agricultural Research in New Delhi, this week (Sept 17-18, 2007) and deliberations from scientists, industry and regulators gave one message - Biotech is important for food security, products being developed are nothing new, but there needs to be a science based regulation.

Current biotechnology can increase crop yields and reduce production costs and increase farmer incomes even for small-scale farmers in developing countries, like in India, who make up a large part of the world’s poor and hungry population. More important for such farmers, many of whom struggle to make a living on marginal land, is ongoing research into drought-resistant and salt-tolerant crops. Biotechnology can help even the landless poor by enriching staple foods, such as through the addition of essential vitamins.

As on date there is no case of disease linked to the genetic modification of crops or animals, nor has there been any disease occurrence. Any linkage to disease or evidence to that effect would be targeted in the risk assessment process that is part of regulatory approval.

Reports by respected international expert bodies like the United Nations Food and Agriculture Organization states “Thus far, in those countries where transgenic crops have been grown, there have been no verifiable reports of them causing any significant health or environmental harm,”. UN FAO, 2004.

We now know fore sure that the use of biotech crops in India has helped the farmers increase the income, by way of saving on pesticides and increased production, getting a better value of the produce. In addition, the farmers has used less number of sprays, thus reducing the exposure to himself, his family members and also the environment.

Amit Sachdev,

India Representative

U S Grains Council

bluecross303@gmail.com

Coarse grain prices remain low in India; Corn production and prices

Coarse grains prices remain low in India

Maize prices in the market yard, tumbled this week as well by another 3% to settle at Rs.6850 per MT. The prices were higher than last year by 5%. Last year during this time the prices were close to Rs.6500 per MT.

Pearl Millet (Bajra) prices were also down to Rs.6300 per MT at the markey yard about 2% lower than last week's prices. Prices werea lso lower than last yearby 2%. Against maize the prices were lower by 7.8%.

Sorghum prices were down by about 10% this week as against last week, to Rs.8300 - 8350 per MT. This is the maximum drop sww by the commodity over the last several months when sorghum prices were climbing. Prices were reported at 7.1% higher than last year. As against maize the prices are higher by 22%.

Barley prices have shot up by almost 11% this week to Rs.9300 on reports of exports. The prices are higher than last year by 18%. Prices are also higher as Ukraine is out of the export market due to a poor crop. The Ukraine previously accounted for 16 percent of world exports, but due to the poor crop this year export restrictions were imposed to ensure that there are sufficient domestic supplies to soften internal prices. In addition, Australia, which normally supplies one-third of world exports, is facing lower crop prospects and depleted old crop exportable supplies, according to USDA statistics.

The prices in US are higher by about $80 per MT, which is a 25% increase. Prices have reached $350 per MT.

Corn prices on CBOT were up marginally for Sept and Dec deliveries to $132.43 and $ 137.39 per MT respectovely

Corn production and prices

Reports from China indicate that the corn prices are likley t o stay higher in the comming years, as the production has stagnated and domestic demand for corn is rising. Though there is a restriction on use of corn for ethanol productoon, demand for feed is rising.

Corn acreage in China is about 28 million hac, which is the maximum and it will be difficult to expand the land under corn. There are reports that farmers would like to move to Soybean or wheat as the prices of these commodities are high.

As per the last report from Minsitry of Agriculture, GOI, Corn has been planted in 7.617 million hac in 2007 as against 7.174 mill hac in 2006 an increase of 6.1% over 2006. (Five year average for area under corn in India has been 6.370 mill hac).

In India, there is pressure on the government to relook the Minimum Support Price (MSP) for Wheat and increase the same to Rs.9500 ($231) per MT from the current Rs.8500 ($207) per MT, an increase of 11.6%, so as more farmers can grow wheat and India should be self sufficient in wheat production. The question though will be that the increase in wheat acerage will be at the cost of some other grain. What happens if due to the increase in MSP farmers in Rabi season shift to wheat planting in Bihar and UP in the corn belt? MSP of corn is Rs.6200 ($151) per MT.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity prices tumble in India; Growth of Poultry in Sri Lanka and Bangladesh

Commodity prices tumble in India

On high production estimates in the Khariff season (Oct harvest) and fewer buyers, coarse grain prices across the board declined sharply. Maize prices were down by about 4.3% over last week settling at Rs.7000 per Mt at the market yard. Prices were down by 4.3% over last year as well. Buying of maize is for current usage only and all buyers are waiting for the new crop which will be harvested in Oct 2007.

Pearl Millet (Bajra) prices were also down by 4.3% over last week, settling at Rs.6400-6450 per MT at the market yard. Prices are down by 6% over last year. As against maize the prices are down by 9%.

Sorghum prices are also down by 1.4% over last week to Rs.9250 per MT at the market yard. The prices are up over last year by 12.7%. As against maize, the prices are higher by 31%.

Barley is probably the only coarse grain, whose prices are up. Barley prices have shown an upward trend of 4% over last week, settling at Rs.8300 per MT. Prices are higher than last year by 6.6%. The increase is prices is being attributed to higher demand for exports and some consolidation by exporters.

Corn prices on CBOT, came down for Sept and Dec deliveries. Prices were $130.38 and $134.40 per MT for Sept and Dec deliveries respectively, lower than last week by about $4 for nSept and $7 for Dec delivery.

Trade reports indicate a higher corn production in US at 333.32 MMT as against the USDA production estimate of 331.57 MMT. Trade also estimates a higher ending stocks at 39.16 MMT as against USDA estimate of 38.5 MMT. Due the increase in prices the average price of Corn may fall to $126 per MT as against 149.60 MT, a drop, not a huge drop. The reason for the small drop is the strong demand for corn from U.S. ethanol plants.

Growth of Poultry in Sri Lanka and Bangladesh

Sri Lankan poultry has been growing steadily for the last 10 years. The latest reports indicate that the placement of broiler is about 7 million/month, 84 million per year. This is a 35% increase from 62 million placed in 1996. The average growth of the industry is about 3.5% per year. The average weight of the birds is 2 kg live, the per capita consumption is at about 6.0 kg per person per annum. Corn production in Sri Lanka is estimated at 40-50 TMT and the requirement is about 200 - 220 TMT. The gap in the supply is fullfilled from the neigbouring countries whenever required and mostly from India.

New processing plants are coming up in Sri Lanka and the current slaughter capacities are about 20,000 birds / hr at standard plants and there are many smaller plants that have also come up in the last couple of years. Food safety is a primary issue in Sri Lanka and almost 80% of the chicken is sold as processed and value added. All plants have to be necessarily HACCP certified.
Major poultry producers in Sri Lanka include Bairaha, Chrisbro, Maxies, Nelna, Prima, Pussella farms. As per the Govt. of Sri Lanka reports the constant value added of the poultry sector increased by 2.3% for 2005. Producer prices of all the livestock items have also increased by around 5% to 29%. This has affected the current value added to grew by 19.3% in 2005.

In Bangladesh the broiler growth is about 10%. In 2007, 320 million broilers are expected to be placed along with about 33 million layers. The overall requirement of maize in the country is estimated at 1.4 MMT. Due to the increase in demand, many farmers in Bangladesh have started cultivating maize instead of Rice. Maize production has touched about 0.4 MMT, which is a 100% increase over last 10 years, when the country was not producing any maize. Of the gap in demand, almost 60% is fulfilled by India, which is a major supplier of maize to Bangladesh.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity Prices Stable; Advantage Biotech; Corn harvest in US

Commodity prices stable

Corn prices were down by about 1% over last week reaching Rs.7150 per MT at the Market yard. The prices were higher than last year by just 2.6%. For the month of August 2007 though the prices were 11% higher than August 2006 prices. GOI has increased the Minimum Support Prices (MSP for corn in the month of August to Rs.6200 per MT and prices at most of the production areas are higher than the MSP.

Pearl Millet (Bajra) prices were down by 0.7% over last week to Rs.6700-6750 per MT at the Market yard. The prices are also lower than last year by 3.7%. The MSP for Pearl Millet has also been hiked to Rs.6000 per MT. The price of Pearl Millet is lower than maize by 6% this week.

Sorghum prices remained stagnant as last week, but the prices are higher than last year by 24%. The MSP for Sorghum has been hiked to Rs.6000 – 6200 per MT for different varieties. The price of Sorghum was running 29% higher than maize this week.

Barley prices were similar to last week prices at Rs.8000 – 8050 per MT, but the prices are about 15% higher than last year. One of the reasons attributed for the higher prices is continued exports to Kingdom of Saudi Arabia.

Prices of corn in US on CBOT closed lower than last week for Sept and Dec deliveries. The prices stood at $127.55 and $133.85 per MT, lower than last week’s $134.4 and $141.17 respectively.

Advantage Biotech

A report from Agro-Economic Research Centre of Andhra Pradesh University on Biotech advantage has provided an insight about the true value of the technology and how farmers have benefited from the technology. The report indicates that in Guntur District of Andhra Pradesh, which uses the maximum pesticide on Cotton, the average number of sprays per hectare has come down to 4.67 in Bt Cotton fields against 11.38 in Non Bt cotton fields, almost a 60% drop. Even the quantity of spray is lower for Bt Cotton area at 4.8 litres/hac against 7.45 litres/hac for Non Bt Cotton area.

Even though the farmer invested more on seeds (Rs.2922 per hac) on Bt Seeds against Non Bt Seeds (Rs1,224 per hectare), the total cost per hectare for Bt Cotton is lower than Non Bt Cotton. One of the major differences is the cost of Pesticide which is Rs.7,380 and Rs.11,410 per Hectare for Bt and Non Bt fields respectively.

The gross income is higher for Bt Cotton is higher by about Rs.16,959, over Non Bt Cotton. The Net income for Bt Cotton on per hectare was reported at Rs.26,406 against Rs.9,059 per hectare for Non Bt Cotton area, which is 1/3rd of the Bt Cotton Net Income.

Corn harvest in US

The U.S. corn harvest is proceeding at a fast pace this year. Reports available indicate that the harvest is early in states of Illinois, Arkansas, Tennessee and the production may exceed pre-harvest expectation in many states. In Illinois the reports indicate a yield of 4.31 tons/acre. It is reported that almost 3-4% of the countries expected production is already harvested. The moisture level at this time is about 16-22% depending on the states. The areas were the corn is being shelled / harvested had hot and dry climate.

As per reports, Louisiana, had planted 0.75 million acres of land and already 75% is harvested. In 2001 the yield was 3.75 tons/acre, which this year is expected to be 4.57 – 5.7 tons/acre. USDA has estimated the corn crop to be 2.78 MMT.

In Arkansas too, the yields are touching 5.08 tons/acre and already 33% of the crop has been harvested. In Texas also the harvest is about 34% complete, as per the information from Texas A&M University Agriculture Program.

Corn harvest is also estimated at 39% in South Carolina, 37% in Georgia. In Alabama though 19% of the harvest is complete, there has been damage reported due to drought in the state.

US farmers are harvesting the biggest land area planted in decades and the production is estimated at 331.58 MMT, which is a record on its own. Of the total world production of 777.15 MMT, US is projected to provide 42.6% of corn. The second highest contributor would be China with 148 MMT (19%) of corn production. India with 15.6 MMT is expected to contribute 2% to the world kitty.

Of the total production (777.10 MMT) for the year 2007/08 and begging stocks (100.20 MMT), the total use of corn in the world is projected at 769.48 MMT, up from last 2006/07 use of 724.87 MMT, which is a growth of 6.15%, which is much higher than the 2.96% growth in use in 2005/06.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity prices are stable; China and Food Safety

Commodity prices remain stable

Average maize prices in India slumped by 3% over last week, reaching Rs.7200 per MT at the market yard. The prices are just about 3.7% higher over last year prices at the same time. During this time last year prices had risen sharply. Though one reason for the lower and stable maize prices is an anticipation of higher maize crop from increased area under the crop.

Pearl Millet (Bajra) prices were up by about 2.3% over last week reaching Rs.6800 per MT at the market yard and are about 3.6% higher than last year prices. The Pearl Millet prices are also lower than maize by 6%. At some places like Maharashtra, Bajra prices are much higher than maize prices though.

Sorghum (Jowar) prices this week also slumped by 4.4%, and were Rs.9200 per MT at the market yard. The prices on an average remained higher than maize by 34%. The prices on an average are higher than maize by 28%.

Barley prices at the market yard also surged by about 3.7% over last week and reached Rs.8100 per MT. The prices are higher than last year by 11.4%.

Corn prices on CBOT were higher than last week and Sept and Dec deliveries closed at $134.40 and $141.17 per MT. Last week the closing was $131.09 and $137.94 respectively. Last week the FOB, US Gulf price for corn was close to $160 per MT for Aug/Sept deliveries.

China and Food Safety

While much has been said about China and its food safety record, the Government of China is going ahead to make a clean sweep and has launched a four month campaign to improve its food safety record. With just one year let for the 2008 Olympics, the government has planned a monitoring system, enhanced inspections and also set up a recall system. The white paper in this regard can found on the link below.

http://www.china.org.cn/english/news/221274.htm

The new system calls for an integrated approach to to monitor the quality of product design, raw materials, processing, sales and service. This will help in improving consumer confidence in the safety of its food and other products.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Commodity Prices Dip; GM food crop trials get a nod in India

Commodity prices dip

Maize prices declined to Rs.7400 - 7500 per MT levels at the market yard on an average in India, translating to a delivered price of Rs.8500 ($208) per MT at the max. The prices are about 1.5% lower than last week. There are no major buys at this point ans most of the end users are covered. But the prices are still higher than last year by 12.5%. At the start of the sowing season (July 2007), the prices were higher than last year by about 18%, while in June 2007, the prices were higher than June 2006 by 21%, which did stimulate the farmers to bring more area under maize in some parts of the country. As per the reports available from Ministry of Agriculture, 7.149 Million Hac of land is under under maize in 2007, against 6.776 Million Hac in 2006. Under normal circumstanses the land under maize is close to 6.4 Million hac. In 2006, as per the Department of Statistics, Ministry of Agriculture, Maize production was 14.98 MMT (11.43 MMT in Khariff - harvested in Oct & 3.55 MMT in Rabi - harvested in Feb/Mar). As the total land is higher by 5.55%, and there has been a better monsoon, the market is expecting a better crop, an additional 10%, which would mean close to 12.6 MMT in Khariff alone.

Pearl Millet (Bajra) prices also slid down on higher supplies in the markets Rajashtan, where the commodity was traded at Rs.6200 per MT. The avearge price is Rs.6600 per MT. The price is 7.6% lower than last year and also 11% lower than maize. The total area under Pearl Millet also gone up to 7.706 Millon Hac in 2007 against 7.270 Million hac in 2006, an increase of 6%. Under normal circumstances the land under Pearl Millet is about 9.17 Million hac.

Sorghum (Jowar) prices were up to Rs.9600 per MT at the market yard, adding 5% over last year. The prices are about 36% higher than last year and 30% higher than maize prices. Area under Sorghum has dropped to 3.156 Million Hac in 2007 from 3.356 Million Hac in 2006, a drop of 6%. Under nornal circumstances, the land under Sorghum is about 4.20 million hac. Lower land coverage is still goingto increase the prices further for the commodity.

Barley prices also moved up by 2.5% over last week, reaching Rs.7780 per MT. The prices are similar to last year prices.

Prices of corn on CBOT dipped for Sept and Dec deliveries to $129.28 and $136.05 per MT.

GM food crop trials get a a nod in India

The Genetic Engineering Advisory Committee (GEAC) gave clearance for the large scale field trails for the first food crop, Bt Brinjal (Egg Plant). The trials will be held at Indian Institute of Vegetable Research, Varanasi. Untill recently only one GM crop, GM cotton is cleared for growing in India, but this being a commericial crop not intended as a direct food has found acceptance with the farmers all over the country.

Bt Brinjal is also expected to generate a similar acceptance, as the vegetable in grown in almost 0.5 million hac of land yileding 8.5 million tons of the vegetable. The farmers need to spray pesticides at least 2 times before each picking to kill the worms. The inclusion of the Bt gene will help reducing the number of spays, which will reduce the cost of production, will be beneficial for the farmers, environment as well as the consumers. The incorporation of the gene will provide inbuilt resistanceto the plant against the insects.

Though the trials are likley to start this year, the commercial crop may not be available untill late 2009.

Amit Sachdev

India Representative

U S Grains Council

E Mail: bluecross303@gmail.com

Commodity prices stable; Biotech or not; Layer sector to grow faster in India

Commodity prices stable

Maize prices in India remained stable at Rs.7500 per MT at the market yard this week, but the prices were higher by about 19% over last year. With rains in most parts of the maize growing areas, there are reports of crop loss by submergence, delayed sowing etc and it is too early to predict the 2007/08 maize crop.

Pearl Millet (Bajra) prices moved up by about 2.7% this week to Rs.6800 per MT at the market yard. The prices are about 13% higher than last year prices. As against maize the prices are 9.5% lower than maize.

Sorghum prices dipped at the market yard this week by 4.6% over last week, to reach Rs.9200 per MT. The prices are about 24% higher than last year. As against maize the prices of Sorghum are 22% higher.

Barley prices have remained stable this week to Rs.7500 - 7600 per MT at the market yard, but the prices are higher than last year by 10.5%. As per the latest USDA production numbers, India's barley production is likely to rise due to more land under the crop.
Barley is used mainly as a cattle feed and by the brewery industry, but more recently has found use in the food especially breakfast cereals, due to health benefits offered by barley.

The latest report from USDA on corn crop, released on Aug 10, 2007 estimates the maize (corn) production to be 332 MMT, up by 24% from 2006, while U.S. soybean production is estimated to be sown by 18%. USDA also estimates that the ending stocks for 2007/08 will be up to 38.50 MMT.

Corn prices on CBOT were slightly up (+$2.59) over last week to $131.09 per MT (Sept Delivery). Prices for Dec also were up by $2.94 to $137.94 per MT.

Biotech or not

Many studies have been conduced which indicate that the biotech feed products are as safe as the products made available through conventional breeding. In the most recent report analyzing 19 separate studies, European Food Safety Authority (EFSA), has concluded that “Animals that have eaten biotech feed show no residual traces in their eggs or meat”.

The statement was against the petition filled by an International Environment Group, demanding special labels for dairy and meat products derived from those animals which have eaten biotech feeds.

The report said, “To date, a large number of experimental studies with livestock have shown that recombinant DNA fragments or proteins derived from GM plants have not been detected in tissues, fluids or edible products of farm animals like broilers, cattle, pigs or quails,”

Another interesting study has been conducted by Northern Ireland Grain Trade Association (NIGTA), on the cost of feed, if biotech is not approved by EU. The study indicates that the feed costs in EU will increase by 25% by 2009, rendering food production uncompetitive, if biotech varieties are not approved.

Layers sector to grow faster in India

Estimates by some of the leading players in the industry indicate that the layer sector in India has found a foothold, specially in the southern India. The layers industry from 2007/08 onwards is likely to grow by 7% as against a 4% growth until last year 2006/07. One of the main reasons of this growth is the stable egg prices and higher demand of eggs in the country.
As per current estimates India will place 175 Million layers in 2007/08 producing 48.8 billion eggs and if the growth of 7% is maintained, the numbers are likely to increase to 213 million by 2010/11, producing 59.8 billion eggs.

There is an increased demand of eggs for export as well from Middle East and East African countries. Cost of production of egg is the cheapest in India at Rs.1.40 per egg ($0.40 per doz) and even with small hitches like bird flu in the North East India, exports would continue if zoning of birds is practiced.

Amit Sachdev

India Representative

U S Grains Council

E mail: bluecross303@gmail.com

Prices of all coarse grains move up, Corn – fuel v/s food

Prices of all coarse grains move up

Prices of all coarse cereals were up this week. The deliveries were slow as many areas of the country experienced extensive rain.

Corn prices were up by about 1% over last week to Rs.7500 per MT at the market yard. The prices are about 21% higher than last year. Prices in Bihar were up to Rs.7200 per MT, but as the state is affected by floods (almost 9 million people are affected and major portion of land is submerged in water), it is very difficult to get stocks out of Bihar. Prices in Gujarat and Rajasthan touched Rs.9800 and Rs.8500 per MT respectively. Even in Tamil nadu, the hub of activity. The prices are close to Rs.7200 – 7300 per MT at the market yard. The latest numbers indicate that the ares under maize in India has increased from 6.155 Mill hac in 2006 to 6.687 mill hac in 2007, an increase of 8.64%. How is translates to higher production is yet to be seen.

Pearl Millet (bajra), prices were up by 1.6% over last week to Rs.6700 per MT at the market yard. The prices are 3.79% higher than last year. The prices are also 12% lower than maize, making it a good substitute against maize. As the prices of eggs have fallen all across the country due to the bird flu confirmation in the country and banning of exports, there is likely-hood that many farmers will try to use Bajra in feed to reduce the cost of production. The total area under Peal Millet as per reports has increased by 12.43% to 7.47 mill hac in 2006 fro, 6.644 mill hac in 2006, which is a substantial increase.

Sorghum (Jowar) prices are up by 6% over last week to Rs.9650 per MT. The prices are 34% higher than last year and about 28% higher than maize. The highest prices were in Maharashtra at Rs.11500 per MT at the market yard. The land under Sorghum has come down by 4.27% as per the latest reports to 3.023 mill hac in 2007 as against 3.158 mill hac in 2006.

Barley prices were reported to be 3.3% higher than last week, reaching a level by Rs.7600 per MT. The prices are also higher than 8.3% over last year.

Corn on CBOT closed at $128.5 – 135.03 for Sept – Dec delivery. This would translate to $145 – 152 per MT FOB, US Gulf, slightly higher than last weeks close. It is getting more and more difficult to estimate the CNF values as the freight costs are so un-predictable. The Baltic Exchange Dry Index, which is managed by Baltic Exchange, London, covers dry bulk shipments, like grain and this has crossed the 7,000 points mark for the first time this week, more than doubling from 3,450 points a year ago.

The Over the last year, the freight costs have almost doubled. Reports suggest that the ocean freight costs for U.S. Gulf-China route have risen by around $35/ton since the beginning of the year, and is currently at $100/ton. One of the main reasons for this increase is being attributed to port congestion in Australia and Brazil, besides increased freightage engaged in hauling coal and iron ore to China.

Corn – fuel v/s food

New estimates posted by private analysts suggest the corn production in US to be 321 MMT (FC Stone) to 332 MMT (Proforma), with the productivity at 3.76 – 3.89 tons/acre. USDA estimated the production at 326 MMT, with an average productivity at 3.81 tons/acre. In 2006, US produced 267.58 MMT, with an average productivity of 3.79 tons / acre.

There is a debate going on that the shift in corn usage from food to fuel will disturb the very economics of livestock farming. Such may not be the case.

In 2006/07 US bio-refineries used 46 MMT (17.2%) of corn for ethanol production. In 2007/08, USDA estimates that the corn for ethanol will be 86 MMT (26%), an increase of 40 MMT over 2006/07. This when the production is likely to increase by 59 MMT, as per USDA estimates.

In 2006/07, the amount of DDG’s produced by the bio-refineries was 12 MMT, which replaced the similar amount of corn, which was then used by other sectors.

There are many more facts that can be seen in the document prepared by National Corn Growers Association (http://www.ncga.com/) on the above debate. The document can be downloaded following the link given below.

http://www.ncga.com/news/OurView/pdf/2006/FoodANDFuel.pdf

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com

Maize up, all other grains down; Zoning in times of bird flu; USGC address shelf life issues of chilled chicken

Maize up, all other grains down

Corn prices in India went up slightly to Rs.7500 per MT, an increase of 2.9% over last week. The prices are about 20% higher than last year during the same time. The monsoon has gone is for a low and might affect the grain production in India if reports from the Meteorological Department are to be believed. The latest numbers indicate that the overall land coverage for coarse cereals is much higher in 2007 (17.277 million acres) as against 2006 (15.423 million acres), the major increase being in Bajra (Pearl Millet) 7.028 million acres, in 2007 as against 5.486 million acres in 2006. Area under maize is marginally up to 6.455 million acres as against 6.042 million acres in 2006.

Area under crops like Pulses (8.495 from 7.489), Oilseeds (13.742 from 12.913), cotton (7.373 from 6.612 and Sugarcane 5.116 from 4.832) have also shown an increase. The big question though will be if the increased land overage will mean a higher crop as this will mostly depend on the monsoon. Overall coverage currently in less by 4% over last year.

International Grain Council now forecasts 2007-08 world corn production at 752 million tons, up 2 million from the June projection, but still up sharply from last year’s 697-million-ton crop. The U.S. corn crop forecast was raised this month by 5 million tons to 320 million tons and China’s output was increased by 2 million to 145 million. The forecast for Production in the European Union was cut by 5.2 million tons to 50.8 million tons, with the largest reduction in Hungary and Romania.

Pearl Millet (Bajra) prices were at Rs.6500 per MT at the market yard, down by approximately 6.5% over last week. The prices are about 1.7% higher than last year, but the prices are 12.5% lower than maize.

Sorghum (Jowar) prices settled at Rs.9000 per MT this week, lower by 2.4% over last week. The prices are about 25% higher than last year, and also higher by 21.7% against corn.

Barley prices have been stable this week at Rs.7300 per MT, but the prices are 6.5% higher than last year. The demand for malt is on the rise as new beer plants come on line.

Last week the prices of corn on CBOT were ranging from $125 – 130 per MT, translated to FOB values of $144 per MT (US Gulf). The prices this week on CBOT were stable at $126 – 132 per MT, translating to US Gulf FOB values of $147 – 149 per MT for Aug to October 2007 delivery.

Zoning in times of bird flu

Bird flu has hit India again, this time in the remotest corner of the country in North east near Imphal, the capital of Manipur. The state shares its border with Bangladesh and Mynamar which had reported Avian Influenza in March and May 2007.

As per GOI, the effected birds have been culled and another 150,000 birds in the vicinity will be culled and farmers compensated.

But with this said, there is all likely-hood that the trade will be affected. India is a major exporter of eggs to Middle east, the trade which was closed for some time and opened only few months ago. Currently about 8 – 10 containers of eggs are exported every day from Namakkal, a small layer town in Tamil Nadu.

There has been a proposal to create disease free zones for poultry, on a similar pattern as has been done for Cattle and Buffalo. 54 districts in India currently FMD Free (Foot and Mouth Disease Free) and the Buffalo Meat sourced from these districts is exported to South East Asia and Middle East countries.

If disease free, high bio-secure zones (with high population of layers and broilers) can be created under similar lines (as FMD free), the industry will certainly be benefit and the trade will not be affected.

USGC addresses shelf life issues of Chicken

The US Grains Council, sponsored the visit of Dr. T C Chen, a Poultry Expert (Scientist Emeritus) from Mississippi State University to India for a week to meet with the poultry processing industry and discuss ways and means to increase the shelf life of chilled chicken. In his travels with the US Grains Council Representative, Mr. Amit Sachdev, Dr. Chen made several observations regarding the process of slaughter and retail chains and also made recommendations.

One of the several observations made included the use of chlorine in chilled water (for chilling the chicken) was lower and needed to be increased to 50 ppm and the need for the temperature of chicken to be brought to 4 deg C or lower, when it exits the chiller. At the retail counters, it was found that the temp was about 4 – 5 Deg C, where as a lower temp of 0 – 1 Deg C was most desirable.

The retail formats though are good, but need to make changes in the system, where in the product is more visible to the consumer and the temperature is maintained.

It is important that the microbial load is kept low and the cold chain maintained, which will enhance the shelf life of the product.

As the retail trade and formats grow the industry will need to make its move to invest in creating infrastructure for processing and also cold chain. At the same time it will be important to create awareness at all the levels (transport, storage, retail and at consumers end) on how the chilled chicken needs to be handled.

Another important aspect was the labelling of the product (chicken) with the best to use date rather than the date of packing and expiry. GOI labelling laws are similar for food and non food categories and A date of Packing, provides a negative aspect (consumer sees a date that is already past), where in the Best to use date provides a positive aspect ( date that is yet to come.

Poultry processing in India is still in infancy. 2006-07 estimates indicate a 1700 million broiler placement of which 5% are processed. In 2007 the estimated number is over 1900 million broiler placement.

In 1960, USA produced 1795 million birds all of chicken were processed of which 83% was sold as whole chicken (processed), 15% as cut up/parts and 2% was further processed. In 2006, the estimated number is 9100 million all of which is processed and only 9% sold as whole chicken, while 44% is sold as cut up/parts and 47% is further processed.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com