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,
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