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.
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
1 comment:
Considering the gradual decline in prices are we looking at a huge crop say over 13 mmt. If so to what extent prices are expected to fall in the key growing states of Karnataka and A.P.?
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