Maize prices slump in India, move up in US; Poultry industry to shrink in US

Maize prices slump in India, move up in US

Maize prices have slumped in the market yard across the country to Rs.7700 per MT, a loss of 2.8% against last week. The prices though still remain higher than last year by 11% at the market yard level for loose material. Reports available indicate that maize is being delivered to destination in Tamil Nadu, Karnataka and also Andhra Pradesh at Rs.8400 – 8500 levels.

In the futures as well as the spot markets the prices have crashed and currently are below the Minimum Support Price (MSP) of Rs.8400 per MT. For Jan 2009 delivery, the prices were down by 3.4% over last week to Rs.7815 per MT< while for Feb and Mar delivery the prices tumbled 4.6% to level at Rs.7820 and Rs.7840 per MT. For April delivery the prices were down by 5.4% to Rs.7900 per MT. On the Spot market, maize at Nizamabad lost 2.73% to level at Rs.8279 per MT. In karimnagar and Davangere the prices were lower than last week by 2.9% and leveled at Rs.Rs.8082 and 8275 per MT.

These low prices are a boon to the poultry sector as the cost of production will go down and as the prices for broilers remain higher due o good demand in North, South and West, it will a good time for the poultry farmers. Even though North East of the country is affected due to bird flu and demand of chicken low in urban and rural belts in the region, other regions of the country are not affected as consumers are aware that bird flu birds will not reach them in their regions and there is no panic.

Pearl Millet (Bajra) prices have gone up in the market yard by 2.2% to reach Rs.7760 per MT at the market yard. Against maize the prices are higher by 1.1%, which has not been case for a long time. The prices are also higher than last year by 14.2% at this time of the year.

Sorghum (Jowar) prices moved close to Rs.8200 per MT, losing 8.8% over the week. The prices are only 6.4% higher than maize and remain lower than last year prices by about 25%.

Barley prices have also slumped by 8.6% at the market yard and are lower than last year by 23.6%. In the spot market at Jaipur the price was down by 0.4% to Rs.9162 per MT (tax paid).

Corn on CBOT moved up by 8.3% for Mar and May delivery to close at $162.27 and $166.30 per MT

Poultry industry to shrink in US

In 2007, US poultry produced 8.9 billion broilers and at the farm level the broilers were worth $21.5 billion and the retail value was $43 billion as per USDA report. The total poultry meat production was 16.374 billion kg, with a per capita consumption of 38.73 kg per person per annum.

In 2008, especially in the last quarter, the poultry industry has cut back production and eggs set have come down by 8% in October and 3% in November against last year’s numbers for the same month. Overall production in November is expected to be lower by 5%, based on slaughter numbers and the trend is likely to continue well into 2009 as per industry watchers. In 2008, the per capita consumption as expected was to be 38.46 kg per person per annum and as new data emerges, this will be down further.

Reports indicate that the US poultry industry is likely to cut production by 5-6%, based on eggs set. The major reason for this production cuts is the lower demand of chicken.

In Brazil too, Perdigao and Sadia, the two largest meat processors, have plans to cut poultry meat output to adjust inventories. This is being down as the exports have slowed and prices will need to be stabilized.

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