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.
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
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