Maize prices stable, others up

Maize prices stable, other commodities move up

Maize prices remained stable this week in India at Rs.7200 – 7300 per MT at the market yard. The prices though were about 26.5% higher than prices last year (Rs.5600 – 5700 per MT) at the market yard. This prices increase is attributed by higher demand for poultry, starch and other uses, but also the inclusion of more maize in the diets of subsistence farmers who may not be in a position to purchase wheat, rice, pulses or other food grains and depend solely on maize in their diets.

The graph shows how the maize prices at the market yeard have risen from April 06 - Mar 07 (kne year period) and the changes on a month to month basis. The prices are based on averages of the prices at the market yard.

Pearl Millet (Bajra) prices rose by almost 13.6% over last week, reaching Rs.7250 – 7300 per MT range at the market yard. The prices area lso higher than last year by 7.5%. Price differential between maize and pearl millet prices is 0.9% (positive), which means the prices of pearl millet are higher than maize.

Sorghum (Jowar) prices also rose by 7.4% over last week reaching Rs.7950-8000 per MT range at the market yard. The pries are higher than last year by 24.2% and the price differential between Sorghum and maize prices is 24.3%.

Though there will be layer farmers who will be able to use pearl millet in their rations even though prices are a little higher or at par, but the broiler farmers will not be able to replace any maize in the rations.

Barley prices also rose this week by 1.2% over last week to Rs.7850 – 7900 per MT range. The prices are higher than last year by 25.5%. Though India is not the largest beer consuming country, the consumption is slated to grow at 15% in the year 2007/08 as per the analysis done by the Beer Manufacturers Association. The total consumption of beer was 135 million cases in 2006/07 and is expected to be 155 million cases in 2007/08. New companies are entering into the market with new products and brands.

Prices of maize in US are stabilizing and the CBOT closed on April 5, 2007 for April delivery at $144 per MT, the FOB value (US Gulf) is indicated at $153.95 per MT. The CBOT values are not as low as on Mar 3 – Apr 3, but are still lower in comparison to last week. FOB values (US Gulf) are also lower than last week May $157.10; June $159.85; July $161.80.

Freight costs are going up and defy all logic, but delays have been reported in Australia, China and also India, keeping the ships tied up in the increasing demand. As India comes into the market again to purchase wheat from the global market, the freight rates might go up again.

It is expected that the maize prices in US will remain strong, due to high demand for ethanol, and even at such a high crop expectation (317 MMT). But this is only a starting point and based on planting intentions of the farmers, there could be some swings, but not large. The production is subject to weather conditions prevailing at the time of sowing, flowering, maturity and harvest. Next week farmers in US will start the planting process and we will see the same in India as well.

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