Commodity prices remain strong; Source of drug resistant bacteria in poultry meat

Commodity prices remain strong

Maize prices are just a tad lower than last week at Rs.6850 per MT, but are similar to last year prices. Average month price for Dec 2007 is Rs.6800 per MT against Rs.6779 per MT in Dec 2006. The production estimates for the Rabi crop are still in preliminary stages, but reports indicate a production of 2.7 – 3.0 MMT as the area under maize has been reported to be up from 0.741 mill hac to 0.978 mill hac, an increase of over 32%, only due to higher prices received by the farmers in the year 2007.

In the spot markets, prices in Nizamabad (Andhra Pradesh), Davangere (Karnataka) were in the range of Rs.6800 – 6900 per MT, while in Ratlam in Madhya Pradesh and Nimbaheda in Rajasthan, prices were close to Rs.8300 per MT, while in Karimnagar (Andhra Pradesh), prices were close to Rs.7000 per MT. In the futures market prices in Jan – Apr 2008 were in the range of Rs.7450 – 7950 per MT, even though a new crop is expected in Mar 2008.

Pearl Millet (Bajra) prices are similar to last week at Rs.6600 per MT, but are lower than last year by about 10%. Against maize the prices are lower by 2.5%. Average month price for Dec 2007 was Rs.6600 per MT against Rs.7365 per MT in Dec 2006.

Sorghum prices have reached RS.10200 per MT at the market yard, about 5% higher than last week prices and 34% higher than last year prices. Against maize the prices are higher by 49%. Average price for the month of Dec 2007 at the market yard was Rs.9670 per MT against Rs.7730 per MT in Dec 2006. The area under rabi sorghum is down slightly from 4.712 mill hac to 4.616 mill hac.

Barley prices reached Rs.10300 per MT, 7% higher than week and 34% higher than last year. Spot prices at Jaipur market were ruling at Rs.12200 per MT (packed). In the futures market, barley prices were Rs.9400 – 9700 per MT for April – July deliveries. Average price for Dec 2007 was Rs.10188 per MT against Rs.7691 per MT for Dec 2006. The area under barley is reported to be up slightly fro, 0.639 mill hac to 0.689 mill hac.

Export of maize continues from India to Taiwan, Malaysia, Korea and other pacific rim countries. There are reports of congestion at some ports as well, which is slowing down exports from India and things will ease out in the next couple of days.

After the wheat fiasco, GOI is in for trouble on Rice front as well and MMTC has come out for a tender to import white Rice. India has been a net exporter of rice and increased requirement, low procurement has led to this situation.

On CBOT, corn prices moved up to $177.94 and $182.35 per MT for Mar and May 2008 deliveries, adding about 2% over last week’s close. Prices are likely to stay form as the crude prices are up and demand for ethanol is going up. Corresponding DDG’s prices are also up.

Source of drug resistant bacteria in poultry meat

While the first source is over use of antibiotics in feed or water to treat infections or their use as growth promoters, there is increasing evidence that humans/workers carrying antibiotic resistant bacteria could be a major cause of its spread among communities as well as on the chicken. In addition humans themselves are to blame for over medicating themselves with antibiotics.

It is important to have a farm to fork approach, as it regulates all the points in the food chain in an attempt to improve safety. A regulation on withdrawal feed (antibiotic free in the last few days prior to slaughter) could be an important factor in the farm to fork policy in addition to using proper bio-security rather than depending on antibiotics. It will reduce the cost of production on one side and also reduce the amount of medication that the chickens and humans are exposed to.

Integrated poultry companies are already following this system of withdrawal feed, but it is the individual farmer who relies more of the market price to sell the stock that needs to be made aware. In a condition where at least 60% of the sector is still with small individual farmers, chicken is sold when the price is right and sometimes when the birds are still on some antibiotics and it is difficult to monitor the supplies, unless there is a law. Countries like Malaysia, Sri Lanka, Vietman all have such laws and it is high time such a law is formulated which will help the industry in the long run.

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

Commodity prices surge in India; Advantage Biotech Maize

Commodity prices surge

Maize prices are slightly up by about 4% reaching Rs.6950 per MT at the market yard this week. The prices are about 3% higher than last year. Reports suggest that over 500,000 MT of maize has been exported from India to Malaysia, Taiwan, Vietnam, Korea, Bangladesh and also to Sri Lanka and there is more to go as price are still conducive for exports.

Pearl Millet prices are up by 3% over last week to Rs.6600 per MT, but are 10% lower than prices last year. Against maize the prices are lower by 4%. Layer farmers are using pearl millet is feeds at about 5% levels to stabilize the feed prices.

Sorghum prices added 13% over last week reaching a level of Rs.9750 per Mt at the market yard. The prices are about 28% higher than last year and about 40% higher than maize.

Barley prices were down by about 8% over last week at Rs.9650 per MT. The prices are about 36% higher than last year. Reports indicate about 300,000 MT of exports of Barley from India.

Prices in US were up slightly over last week to $174.60 per MT at CBOT close on Friday. Indicative FOB US Gulf prices were $206.90 per MT for Jan/Feb 2008 deliveries. Indicative FOB PNW prices were $238 per MT for Feb/Mar 2008 deliveries.

In order to stem the rise in inflation China has chosen to auction 500 TMT of maize on Dec 25, 2007 as per reports available. Earlier auctions of 2 lots of 500,000 made available some quantities of corn into the market and stabilized the prices.

EU is currently reeling under severe feed grain shortage and reports available indicate that the shortage is likely to continue for the next two years. USGC estimates that EU will buy at least 10 MMT of corn and 3.9 MMT of sorghum.

Advantage Biotech maize

In April 2007, a report by PG Economics concluded that using biotech maize not only improves yield and increases the profits of the farmers, but also as biotech maize contains lower levels of myco-toxins, it is better for animal health.

In 2006, about 65,000 hac of Bt Maize was planted in seven EU states and in all the states the maize yield was higher by about 10% against the conventional non biotech varieties. The most significant advantage found was a significant reduction in myco-toxins found in biotech maize.

In early Dec 2007, European Commission has sent out proposals to all states for approval for new Biotech maize varieties. The new varieties are biotech varieties of hybrids that are already approved in EU and need to be authorized for food, feed, imports and processing, but not for cultivation.

EU is also looking to approve a variety of biotech potato, which has higher starch and will be used for industrial purposes only. The by-products from the above two will be allowed to be used in animal feeds.

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

Commodity prices in India stable, prices in US move up; Poultry team from Iraq in India

Commodity Prices in India stable, prices in US move up

Maize prices remained stable across the country at about Rs.6700 per MT and the prices are similar to last year values even though good arrivals were reported at most of the mandis. Expect the prices to stay firm for the next two months at least.

Pearl Millet prices dropped by 4% over last week to Rs.6500 per MT at the mandi (Market Yard). Te prices are lower than last year by 9%, Against maize the prices were reported lower by 3%.

Sorghum prices on an average dropped by 15% over last week dropping to Rs.8600 per MT level at the market yard. The price though is still higher than last year by 16%. Against maize the prices are higher by 30%.

Barley prices moved up slightly by 1.6% to Rs.10500 per MT level at the market yard. The prices were higher than last year by 29%. Though the govt. expects a higher crop this year, the prices are likely to remain higher for the coming season.

Corn on CBOT touched a new high for Dec 07 and March 08 at $ 165.34 and $172 per MT levels. FOB US Gulf values were indicated at $ 204.80 per MT, while FOB PNW were indicated at $235.50 per MT.

DDGS prices have also increased in the midst of increasing corn prices in the US and FOB US Gulf is indicated at $197 per MT for DEC and up to $200 per MT for Jan shipments. Values for DDGS delivered to South China (CNF) in 40 feet containers is indicated at $305 per MT.

As the ingredient prices in India have touched higher levels, specially soybean meal, farmers and feed millers are unable to keep the feed prices under check. While broiler feed was being sold at Rs.14000 per MT, the layer feed is being sold at Rs.9000 – 10000 per MT. Feed constitutes at least 65-70% of the cost of production of broilers or eggs and even a small increase, eventually increases the cost of production of broiler and eggs.

Poultry Team from Iraq in India

A 5 member Iraqi poultry team, sponsored by U s Grains Council visited India this week to study growth of the Indian poultry sector and meet and chalk out a program for the development of poultry industry in Iraq. Since the war the sector has been devastated and needs infusion of technology and training.

The team visited Pune, Namakkal, Erode and Coimbatore in 5 days and travelled to the Indian poultry belts to see broiler breeder operations, layers operations, feed mill, commercial broiler farms and were impressed by the commitment of the farmers and companies alike in getting results, which are at par with the western world. Breeders giving 185 Hatchable eggs, Layers giving 320 eggs (Hen housed), Broiler performance at 1.82 FCR at 2 kg body weight with a liveability of 95 – 97% was most impressive, which is not possible in Iraq at this point, due to lack on technology.

The team was impressed by the infrastructure of training institute, testing labs, that have been created in the country by the industry. In addition the work being done by National Egg Co-ordination Committee on eggs and Broiler Co-ordination Committee on Broilers impressed the team as both the organizations strives to help the farmers get a fair price for their produce and at the same time creating awareness about the eggs and poultry meat amongst the consumers at large.

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

Maize prices stable - despite good arrivals; Grains prices will stay up

Maize prices are stable - despite good arrivals

Maize prices on an average are up by about 1.5% over last week, reaching Rs.6800 per MT level. Prices are lower than last year by about 1.7%. Average prices are much lower in Andhra Pradesh, Karnataka and Maharashtra, which is receiving good arrival of the crop. In the long run, the price may not be expected to go down drastically, due to strong demand in the poultry sector, which is expected to need 8.21 MMT in 2008/09.

Pearl Millet prices stumbled by 3.5% over last week to Rs.6700 per MT, similar to maize and the price is also lower than last year by 11%.

Sorghum prices moved by to Rs.10150 per MT, up by 1.8%, over last week. Against last year, the prices are up by 22.3% and against maize the price is up by 49%.

Barley prices have also moved by 3.4% this week , to Rs.10320 per MT at the market yard. The price is 31% higher than last year. This year high prices have prompted farmers in Uttar Pradesh, Punjab, Haryana and Rajasthan to plant more Barley. The respected crop is 1.61 MMT, higher than last year, but still lower than the target of 2.0 MMT fixed by Ministry of Agriculture, GOI.

Corn prices on CBOT were up over last week, and Dec futures closed at $157.27 per MT, up from last week close of $151.32. Mar 08 futures closed at $164.26 per MT, up from $158.02 of last week. FOB values (US Gulf) also moves up and were indicated at $194 – 195 per MT for Dec 2007 – Feb, 2008.

Grain Prices will stay up

As per a report released by IFPRI, the food production is likely to take a hit and reduce by 16% by 2020, mainly due to climate change. The food prices all over the world have risen and the rise is the most since 1973/74.

Though the harvest of 2007 has been the highest at 2.1 Billion tons of cereals, up by 4.6% over last year as per FAO, the prices have remained higher and average world prices in Nov 2007 were higher due to continued strong demand. The AGFLATION (inflation in agricultural product prices) is the highest at the time when the production is also the highest. Some countries, like Australia, were bit by drought, but higher production in other countries covered the shortfall and produced more.

Two countries, China and India increased the incomes substantially, which made buying food, particularly cereals, pulses and meat more affordable. As demand rose and supply strained, the prices were up.

In China the per capita meat consumption as per a report was 20 kg in 1985, which in 2007 is estimated at 50 kg. As per the report the global GDP is growing at over 4% for the fifth successive year and as the demand of meat is tied to economic growth, that is where most of the cereals are ending – feed for animals.

The increase in prices is also helping farmers getting a better price for the produce and looking at India, the maize farmers are selling their produce at 8% higher price than the Minimum Support Price set by GOI. It is the private trade and end users which is buying all of the stocks and there is no need for the government to intervene.

Amit Sachdev

India Representative

U S Grains Council,

bluecross303@gmail.com

Stable Prices - helps users purchase; Good Genetics and Dairy Growth

Stable prices – helps users purchase

Maize prices in India this week remained stable at RS.6700 per MT range, despite higher deliveries in Karnataka and Andhra Pradesh, clearly showing higher demand is keeping the prices stable. Any let up in demand from poultry sector or starch will bring down the prices. The prices are similar to last year. For the month of Nov 2007, the average price of maize was Rs.6660 per MT against Rs.6600 for Nov 2006, just about 1% higher. The price for Nov 2007 though is higher than Oct 2007 by 1.67%.

Pearl Millet (Bajra) prices were up by 1.3% this week to Rs.7000 per MT at the market yard, but were lower than last year prices at this time of the year by 5.8%. Against maize, the prices were higher by 4.3%. For the month of Nov 2007, the average prices were Rs.6700, about 4.86% higher than Oct 2007, though the prices are lower than Nov 2006 prices by 10.5%.

Sorghum (Jowar) prices were up by 10%, reaching Rs.9960 per MT in the last week of Nov 2007 and were reported 32% higher than last year, during the same period. The prices were also higher than last corn by 49%. Average prices for the month of Nov 2007 were Rs.9540 per MT, 3.4% higher than Oct 2007 and 29% higher than Nov 2006. Against maize, the average prices were up by 30% for Nov 2007.

Barley prices reached Rs.9980 per MT at the market yard, just about 2% lower than last week, but 12% higher than last year. Average prices for Nov 2007 were Rs.10546 per MT, than Nov 2006 prices by 31%, but only 1.3% higher than Oct 2007 prices at the market yard.

Prices in US were up slightly, Dec corn closed at $151.32 per MT, up from $150.38 last week , while Mar delivery closed at $158.02 per MT, up from $156.92 per MT. Deliveries to SEA are being quoted anywhere from $270 – 290 per MT.

Good genetics and Dairy Growth

The Indian dairy industry is at a cross road, while the production of milk is estimated at 100 MMT, the efficiency of production is still much lower (at 1 Ton/animal/year). Two major issues that can slow down the growth of the sector :

1. Genetics: GOI has finalized the protocol for import of semen, embryos and live animals from different countries. But there are still some issues within the protocol that need to be understood and based on the information available, the imported semen will not be cheap, but will certainly be better and the new generation of animals will certainly be more efficient in production.

The guidelines can be found at http://dahd.nic.in/trade/RGIIEX.htm.

And the revised protocol for the import of bovine semen can be found at http://dahd.nic.in/trade/revised%20draft%20notification.doc

2. Feed and Fodder: Lack of fodder and feed will pull down the growth of the sector. As per GOI sources the available fodder can meet the demand of only 46.7 per cent of livestock. It will be important that farmers are made aware of the value of concentrates/Balanced Cattle Feed that can supplement the fodder and straw that is fed by the farmers.

In a country like Kenya, small farmers have been helped by the introduction of genetics and feed and fodder. From 18-20 kg at the 70 day peak in 305 day lactation, using better genetics have lead to 40 kg milk production at the 70 day mark in 305 days lactation. Average lactation of some animals has reached 9000 litres over a 10 month period.

Amit Sachdev

India Representative

U S Grains Council

bluecross303@gmail.com