Commodity prices slump; Indian corn production to be lower

Commodity prices slump

Coarse grain prices across the board slumped in India this week. Maize prices were down by 0.6% to reach Rs.8500 per MT at the market yard. Average for Sept 08 was Rs.8500 per MT, while for Sept 07, the prices were Rs.6871 per Mt at the market yard. Against last year average the prices are higher by 23.7%.

Pearl Millet (Bajra) prices also were down by 7.2% to level at Rs.7090 per MT. Against maize the prices are lower by 20%. Average for Sept 08, was Rs.7138 per MT, about 9.5% higher than, Sept 07 rates of Rs.6510 per MT.

Sorghum (Jowar) prices were down by 3.8% this week to Rs.9090 per Mt at the market yard. Against maize the prices are higher by 6.4%. Prices averaged Rs.9673 per Mt in Sept 08,, 3.77% higher than Sept 07 rate of Rs.9322 per MT.

Barley prices were also down by 0.5% to reach 9600 per MT. Average price for Sept 08 at the market yard was Rs.9500 per MT

Corn prices in the US are stable. Corn on CBOT closed at $213.77 for Dec 2008, while for March 2009, the value was $220.85 per MT. Indicative prices for OCT – Feb delivery (FOB) US Gulf was $233- 240 per MT, while PNW values were close to $272 – 275 per MT.

Freight markets are down considerably since last week. US Gulf – Japan freight is down to $65 per MT against $91 last week. Similarly PNW – Japan freight is down to $43 per MT against $60 last week.

DDGS prices have come down in relation to corn prices this week. FOB US Gulf prices was indicated at $197 per MT, while FOB PNW was $213. Prices of a 40 foot container delivered to Thailand was indicated at $283 per MT.

Indian corn production to be lower

The latest estimates from GOI predict a 15.5% lower corn crop for Kharif 2008 season. The production is estimated at 13.1 MMT against 15.51 MMT produced in Kharif 2007.

The estimate for total grain output from kharif crops has been cut to 115.3 MMT from 120.9 MMT. The government is likely to review restrictions on rice exports in November, while the ban on corn exports, which lapses on October 15, will only be extended if the crop is poor.

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

Commodity prices stable, rains and floods cause damage; China may have a long term corn supply crunch

Commodity prices stable, rains and floods cause damage

Maize prices at the market yard was down by 1.7% to Rs.8555 per MT this week. Reports indicate that arrivals have started in some parts of Andhra Pradesh and Karnataka. The maximum price for Yellow corn at the market yard was reported at Rs.9250, while for the Red variety the highest reported price was Rs.9500 per MT.In the futures market the prices are up for Jan 2009 delivery by about 5% this week over last week. For months Sept – Dec the prices are up in the range 1 -3%. In the SPOT marks though prices ae stable or are down in the range 0.5 – 1.5% this week.

Pearl Millet prices were up by about 2.7% this week to level at Rs.7650 per MT. The prices are about 12% lower than maize prices.

Sorghum prices were lower by 2.2% this week to reach Rs.9445 per MT at the market yard. Prices are higher than maize by 9.4%.

Barley prices were up by 4% to reach 9560 per MT at the market yard.

On CBOT corn prices for Dec delivery were down from last week’s 221 to 213.45 MT. March delivery was $220 per MT.

Unprecedented rains in all parts of North India, Gujarat, Orissa, parts of Andhra Pradesh have caused heavy damage to the crops. Many areas of Gujarat and Orissa are under flood. Rice crop in parts of Punjab and Haryana where harvest had started is likely to be damaged in these rains. GOI reports indicate that at-least 1.8 mill hac area under Khariff has been affected due to floods uptill Aug 2008. And the new spell of floods in Sept in likely to affect areas in Maharashtra as well.

Latest crop data reveals, Maize sowing lagging behind at 7.12 mill hac in 2008 against 7.351 in 2007. Area under Pearl Millet (Bajra) is down at 7.77 Mill hac against 8.27 Mill hac in 2007. Area under Sorghum is down to 2.913 against last years 3.394 Mill hac. Even area under pulses is down to 10.28 mill hac against 12.30 Mill hc in 2007.

China may have a long term corn supply crunch

The corn demand in China for 2008/09 may be higher than the supplies. China is expected to produce 142.5 MMT while the demand is likely to be 170 MMT as per Government estimates.

Reports from China indicate that farmers have shifted to rice, which is a staple and this will lead to long term supply crunch for corn in China.

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

Commodity prices move up; Second largest US corn crop in offing; Information on food safety issues in world trade

Commodity prices move up

Maize prices moved up by about 5.6% this to Rs.8700 per Mt at the market yards. For the week ending Sept 7, the prices were s.8200 per MT. Against last year, maize prices were ruling 21.5% higher. In the futures as well the prices from Aug 22 – Sept 12 period for Sept delivery have registered a upswing of 4%. Fir deliveries in months of Oct – Jan, the prices have gone up by 0.2 – 1%. In the spot markets as well, for the three week period, the prices at Nizamabad have shown an upswing of 2.5% to Rs.10,115, Karimngar up by 6% to 10,350 per MT . It was only at Davangere that the prices have been down by 0.7% to Rs.10400 per MT levels. Reports are that at some location in Andhra Pradesh, stocks have started to come into the market.

Pearl Millet prices added about 16.3% to its tally reaching Rs.7450 per MT. Fort he week ending Sept 7, prices were close to Rs.6400 per MT on an average. Against maize, the prices are lower by 17%. The prices were about 15% higher than last year.

Sorghum prices were down by about 8% this week to Rs.9650 per MT at the market yard.. For the week ending Sept 7, the prices were Rs.10,500 per MT. Against last year the prices are up by 14%. Against maize the prices are up by 10%.

Barley prices were down by 4.6% this week to Rs.9200. For the week ending Sept 7, the prices were Rs.9600 per MT. Over last year, the prices are actually down by 1%, which may be good news for the brewery industrly.

On CBOT, the prices were $215.5 – 221.7 per MT for Sept – Dec delivery, The prices are up over last weeks close of $209 – 215 for the same months. The indicative FOB prices from US Gulf would be close to $240 – 245 per MT for Oct – Dec and for PNW $290 per MT.

Second largest US corn crop in offing

The WASDE report on Friday, Sept 12, 2008 shows an increase in domestic sorghum production and the second-largest corn crop on record. The increase in production is driven by global demand. U.S. sorghum production for 2008/09 is estimated at 10.82 MMT. Barley production is estimated at 4.746 MMT.

The 2008 corn crop is also projected at 306.78 MMT, though about 7 MMT lower against last month's estimates, it will still be be the second-largest crop in US history. The productivity is expected at 3.868 tons/Acre.

Information on food safety issues in world trade

Five commodity associations, U.S. Grains Council, U.S. Soybean Export Council, U.S. Meat Export Federation, the USA Poultry and Egg Export Association, and U.S. Dairy Export Council have joined hands to form Food & Agriculture Export Alliance (FAEA). The association has launched a new Web site facilitating international trade by providing information to promote better understanding of food safety based import and export standards.

The site, which is presented in both Chinese and English language, allows users to easily access U.S. and international food safety regulations, the latest news from appropriate regulatory agencies and training modules.

This site can be accessed in English at www.usfoodsafety.cn/webs/standards.aspx

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

Commodity prices stay up; US Grains Council brings Dr.Shukla to India

Commodity prices stay up

Maize prices were down for the week ended Aug 29, 2008 by 0.6% to Rs.8740 per MT at the market yard. But the prices were about 18.2% higher over last years prices in the last week of Aug 2007. For the month of August 2008, the prices averages Rs.8914 per MT, about 21% higher than Aug 2007.

Pearl Millet (Bajra) prices were up by 2.8% to Rs.7585 per MT and were also 11.5% higher than last year prices. The prices were lower than maize by 15.2%. For the month of Aug 2008, prices were Rs.7657 per MT at the market yard, about 13.7% higher than Aug 2007 average.

Sorghum (Jowar) prices were up by 8.6% this week to Rs.11,655 per MT at the market yard. The prices were higher than last year by 21%. Against maize the price are higher by 25%. For Aug 2008, the prices averaged Rs.10919 per MT, about 17% higher than Aug 2007.

Barley prices slumped by 1.7% this week to Rs.9960 per MT at the market yard, but the prices were about 19.3% higher than last year values. For the month of Aug 2008, the prices were Rs.10,256 per MT, about 30% higher than Aug 2007 prices.

On Feb 29, 2008, corn on CBOT for Sept and Dec delivery closed at $223 – 230 per MT, about $7 lower than last week’s close. FOB (US Gulf) values for Sept – Dec were close to $250 – 255 per MT. FOB (PNW) for Oct – Dec were close to $295 per MT.

US Grains Council brings Dr.Shukla to India

The All India Starch Manufacturers Association (AISMA) organized a starch application seminar on Aug 26, 2008 at Ahmedabad. Dr.Triveni P Shukla, independent consultant for U S Grains Council provided insights to the participants on the new products and applications.

Dr.Shukla was of the opinion that as the food and the packaging industry grows, the demand for value added starches will grow and the industry will need to move in that direction. At the same time, the industry will need to work closely with the new Food Standards and safety Authority (FSSA), and create new food standards where starch is used as an ingredient and not considered as an adulterant in food. In india the average per capita starch consumption is less that 0.5 kg, which in the US is over 6.0 kg.

On the efficiency factor, Dr.Shukla opined that the use of water in starch production should be 1:9., i.e., for every ton of corn at least 9 tons of water must be used. This water used mostly for steeping and washing plays an important role in the starch recovery, which is US is about 68%.

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