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
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