Stable cereal prices in India, but higher world demand will fuel prices
Maize prices have remained stable this week at Rs.7100 – 7200 per MT range at the market yard. Reports indicate some flow of material into Bihar markets, priced at Rs.7400 – 7500 per MT at the market yard. The average prices in India are lower than prices last year by 4 – 5%, on reduced demand. As the east starts to place chicks, some demand will be seen in coming weeks.
The Economic Coordination Committee (ECC) of Pakistan gave formal approval to import maize from India to cater to the domestic needs. The imports will be duty free and can be implemented through land route. Current;y wheat is being used in Pakistan to fee poultry and livestock. Exports to Pakistan will further increase the maize prices in India.
Pearl Millet prices moved up by about 1% over last week to Rs.6450 – 6500 per Mt range. Prices are still lower than last year by 4.6% on an average. Against maize the prices are lower by about 9%.
Sorghum prices have moved up by 2% to Rs.9100 range, but are still lower than last year prices by 3.5%. Against maize the prices are higher by 28%.
Barley prices were down this week by 3%, to Rs.10160 – 10200 per MT range at the major markets in North India. Prices are still higher than last year by 22%.
As the weather has been much colder than normal in the northern belt, it might affect the crops negatively. There is more concern about wheat crop than the coarse cereals.
Corn on CBOT was up for Mar and May deliveries, closing at $202.65 and $207.47 per Mt respectively. US Gulf FOB indicative rates for corn were ranging from $226 -227 per MT.
DDGS prices on the other side were lower this week by $3 – 6 per MT over last week. DDGS at current level makes an attractive feed ingredient in poultry and dairy rations. CIF, New Orleans value for DDGS is indicated at $ 196, while FOB US Gulf process was $ 202 per MT. This is for 36% profit DDGS.
Freight rates tended to go up this week. Indicative values for US Gulf Japan were $ 105 per MT, while PNW Japan was $63 per MT.
As per the FAO report this week, world cereal supply is likely to remain tight and will drive prices higher in the current marketing year. To offset the price increase it may require significant increases in production of more than one season's cereal crop for markets to regain their stability and for prices to decline significantly below the recent highs.
World cereals demand is expected to rise 2.6 percent to 2.120 billion tons , about 1.6 percent above the 10-year average, in 2007/08 and would outpace output growth, putting a pressure on already thin global stocks. High energy and feed demand has triggered a more rapid fall (8.6%) in coarse grain stocks, to estimated 156.1 MMT by the end of 2007/08 season against previously expected 170.8 MMT as per the FAO report.
India to advance biotech approvals and more farmers in the world embrace the technology
The Supreme Court this week lifted the ban on approval of new GM crops in India, and asking Genetic Engineering Advisory Committee (GEAC), which works under the Ministry of Environment and Forests (MoEF) to set in place proper guidelines and bio-safety norms. This is a victory of sorts for those who are in favour of the new technology.
New trials and approvals were banned in Sept 2006 and in May 2007, the ban was modified and field trials were allowed. The new order this week, vacates the old order and gives way for approval of new crops using the technology.
Since 1996, biotech crops have been grown by millions of farmers across the world and in most cases resource poor farmers in the developing world. It has helped increase farm incomes, through reduced costs and/or improved yields. It has also helped in reducing pesticide applications and reducing green house emissions. Of the 12 million farmers worldwide who grew biotech crops in 2007, 11 million are "resource-poor, as per a report from International Service for the Acquisition of Agri-biotech Applications (ISAAA).
In 2007, a record 282.3 million acres of the world's cropland were planted with soybeans, corn, cotton and other biotech crop, an increase of about 12 percent from the previous year, according to ISAAA.
In the developing countries, Argentina led developing countries with about 47.2 million acres in biotech corn, soy and cotton, followed by Brazil, which had just over 37 million acres of biotech cotton and soy.
In the European Union, Spain ranked highest with about 173,000 acres of biotech corn but 12th overall, behind Paraguay, South Africa, Uruguay and the Philippines.
The use of new technology has already helped the farmers in India reap a bountiful cotton crop, and farmers planted 15.3 million acres of biotech cotton in 2007, its only biotech crop. The new generation of biotech crops will help more farmers reap the benefits of the technology.
Brazil’s National Biotechnology Council has also approved use of biotech corn this week. Brazil, is the third largest corn producer after U.S. and China. Brazil’s corn crop this year is expected to be 53.4 MMT against 51.4 MMT last year. Brazil farmers for the last couple of years were allowed to grow only biotech soybean and cotton. The move to grow biotech corn will certainly help the country boost its production potential.
Amit Sachdev
India Representative
U S Grains Council
bluecross303@gmail.com
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