Commodity prices high this week
Maize prices in India soared again this week, reaching levels of Rs.7200 - 7300 per MT at the market yard. The prices are 3.5% higher than last week and about 14% higher than last year prices.
Sorghum (Jowar) prices dipped little (1.4%) over last week to Rs.8700-8900 per MT range at the market yard. The prices are still higher than maize by about 21%.
Pearl Millet (Bajra) prices remained stable at Rs.7100 – 7200 per MT and are similar to maize prices. The prices are just about 2% higher than last year prices. There is some substitution of the pearl millet in poultry rations in north India, especially in layer rations, which might help some poultry operators, but this may not go on for long.
Barley prices shot up this week to Rs.8700 – 8800 per MT range, an increase of 16-17% over last week. The prices though are lower than last year prices by 6%.
The high prices have taken a toll on the inflation, which has hit 6.12% for the week ending Jan 06, 2007. This is the highest rate of inflation in two years. This is much higher than the Reserve Bank of India (RBI) projected inflation of 5 – 5.5% range. One of the major causes of high inflation is the high price of commodities.
It is not only in India that high commodity prices are affecting a common man. In Mexico, where Tortillas are a staple, the prices have shot up by over 400% as per a report. Tortillas are made from corn.
As per a report from China Information Centre, the grain prices may increase by over 6%. The increase is price is being attributed to high input costs, tight world market and drought in Australia.
CBOT prices for corn closed on Friday higher than last week. March delivery $160 per MT (higher by 2.5% over last week), and May delivery $164.54 per MT (High by 2.6% over last week.)
Death bed for live poultry markets
With South East Asia getting a fresh dose of AI cases, it does sound like death knell for the live poultry markets in countries where buying chicken from the live markets is a way of life. In countries like China, Hongkong, Vietnam, Indonesia, Thailand, Cambodia, the governments started the registration of farms and also supervision of the live markets. In certain areas the live markets were completely closed, which did effect the business, but the show must go on.
In Egypt, after the first AI cases were reported, the government ordered complete closure of the live markets. Like in India, Egyptians do prefer to buy freshly cut chicken. Due to HPAI, 30 million birds were culled and slaughtered as per a report.
The sales due to the HPAI outbreak also suffered, and affected lives of the live bird sellers, traders and also the farmers in Egypt. Cairo Poultry Company (CPC), as per a report was slaughtering 110,000 birds/day before the outbreak and reduced the capacity to 70,000 birds/day.
But some of the venders did smell a business opportunity and shifted to selling frozen chicken and value added products, the sales of which are not as good, but they are back in business and the sales are growing. As more outlets for frozen chicken have opened in Egypt, it is more valuable than live chicken and demand is increasing. This has also force CPC to run the plant to full capacity of 110,000 per day and has already made an investment to increase the capacity of the plant to 300,000 birds/day.
The total broiler placement in Egypt is 800 million per year (about 50% that of India), but the acceptance of frozen chicken is fast and Government looking at taking a Public Private Partnership (PPP) route for setting up chicken slaughter houses.
The reason for the drastic change in closing the live markets is not only for the consumer safety, who go to these live markets t purchase a chicken for the family, but public safety at large. There is not way to stop migration of wild birds. These birds can only be tracked and surveillance stepped up. Change in the way business is conducted is possible and that is what most governments are looking at.
Adoption of Agri-Biotech on an increase
As per the report by International Service for the Acquisition of Agri-biotech Application (ISAAA), the total area under biotech crops leaped to 102 million hac (251.94 million acres) in the year 2007. This is a growth of 12 million hac (29.64 million acres), 13.3% increase over 2005 acerage.
One of the primary reasons for this increase has been attributed to the increase profits by the small land holders, who save money by reducing the number of sprays of pesticides and increase in yields attributed to biotech crops.
The most dramatic acceptance has been seen in India, where the increase has been from 1.3 million hac (3.2 million acres) to 3.8 million hac (9.38 million acres), an increase of 2.5 million hac (6.17 million acres) or 192% in one year.
This has also helped India become the fifth largest producer of biotech crops, surpassing China for the first time.
Of the traits and crops whose acreages have increased, Bt Cotton heads the race with the increase in acreage by 63% from 4.9 mill hac to 8 million hac., followed by Bt/HT Maize at 53.8% from 6.5 million hac to 9.0 million hac and HT Maize at 47% from 3.4 million hac to 5.0 million hac.
Of the total 102 million hac land under biotech crops, more than 53.5% land (54.6 million hac) is accounted for in US. The second in the line is Argentina with 18 million hac, followed by Brazil at 11.5 million hac.
ISAAA also estimates that by 2015 the total acerage would be up to 200 million hac and almost 20 million farmers will be benefited from the technology. Currently 10.3 million farmers are utilizing the technology of which almost 90% are in developing nations and are resource poor, small land holders.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Jan 20, 2007
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