Volatile coarse grain markets, exports to continue from India; Poultry farmers make profit in India

Volatile coarse grain markets, exports to continue from India

Maize prices moved up by another 3.4% this week to reach Rs.8600 per MT at the market yard. Prices are higher than last year prices by 16.4%. As there are averages, reports are price of maize in the interiors is close to Rs.7600 per MT and in some cases upto Rs.8000 per MT. Price of corn in non producing states like Punjab are reported at Rs.9000 per Mt while in Andhra a ear Rs.8000, and Karnataka as low as Rs.7700 per MT. Reports indicate that prices at Kakinada are at Rs.8600 per MT as most exports are likely to take place from Kakinada.

Bihar crop has started to arrive in the market, but with a high moisture content (18-20%) and this cannot be used by the poultry industry and must be dried to ) before it is packed and stored.
In the spot market, maize prices moved up in Davangere and Nizamabad by 1.3 and 0.25% respectively over last week prices, but remained lower than MSP values by Rs.400 – 600 per MT. In Karimnagar though, prices moved lower by 1% to Rs.7900 per MT. In the futures market, prices moved up slightly by 0.3 – 0.8% over last week, but overall prices remained lower than MSP of Rs.8400 per MT. Would that mean that GOI or state agencies will step in to purchase corn, is a question. There is a tender from FCI, South zone to sell 326,000 tons of maize in the open market (from Karnataka). This is to clear the space for the wheat and rice purchases.

Pearl Millet (Bajra) prices also moved up by 4% to reach Rs.8835 per MT at the market yard on average, pan India. Prices are higher than last year by 17.3%. Against maize, prices are higher by 2.8%.

Sorghum (Jowar) prices added 7% to its tally, reaching Rs.10,349 per MT. The prices however remained lower than last year by 1.5% and higher than maize by 17%.

Barley prices also added 6%, reaching Rs.8160 per MT at the market yard. The prices were lower than last year by 22%.

Prices in SPOT market fell by 5% as deliveries started in the market. Prices have remained higher than the MSP of Rs.6800 per MT. In the futures as well, prices were reported to be down by 2% over last week.

On CBOT the week ended with prices moving lower by 2.1-2.4%. May $152.53; July $156.44; Sept $160.22. The FOB values (US Gulf) were reported at $174-176 per MT for Apr – July, based on the above prices, while the FOB (PNW) is reported at $$189-194 per MT. Sorghum prices (FOB US gulf) were lower than corn at $167-170 per MT.

The freight rates have remained stable this week, US Gulf-Japan $40, PNW-Japan $20, US Gulf - China $44, while Brazil - China $35 per MT. Delivery values for corn in SEA region would be close to $200 – 209 per MT depending on the origin. Farmers in Argentina have a 7 day strike to eliminate export tax and no easy solution is on the horizon as per reports. Brazil is reported sales of corn at $167 FOB.

DDGS prices have moved up slightly to $216-220 per MT delivered SEA region. The issue still is the availability of containers for delivery to SEA region. Delivery of DDGS to New Orleans is about $160 per MT on barge.

There are reports that Indian corn is finding buyers as there is price parity against US/Brazilian corn in the SEA region. FOB values were reported at $170 per MT and delivered values $190-194 per MT. The business is mostly in containers.

Poultry farmers make profit in India

Even though there is a down trend, the poultry farmers selling live chicken are making money. SBM prices are higher, but corn prices are stable. The placement of broilers is still at about 35- 36 million per week, while the demand may be higher, which is pulling the prices up. Bombay prices were Rs.52 per kg (live),while the cost of production is about Rs.40 per kg (farm gate).

There are areas in North India, where people will not be consuming Non Veg food for the next nine days and this may bring the prices lower, but to what extent is still to be seen.

Reports indicate place,ent of broiler parent stocks in many areas in the last 2 months, which will be comming in production in the next 6 - 7 months and supplies of chicken would increase sometime from August onwards.

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

Coarse Grain prices - ups and downs

Coarse Grain prices - ups and downs

Maize prices moved up at the marker yard by 3.3% to average at Rs.8300 per MT. Lowest level of maize was at Rs.7700 per MT as arrivals have also started for Rabi crop in some areas. The prices have remained higher than last year by 13.7%.

In the future market prices have remained similar or moved lower than last week for Mar to may delivery. SPOT market prices in Karimnagar and Davangere were down by 1-1.5% to Rs.8000 and 7800 per MT respectively.

Pearl Millet (Bajra) prices slumped by 1% to Rs.8500 per MT range, but have remained higher than last year’s prices by 17.4%/ Against maize too, the prices have remained higher by 2.2%.
Sorghum (Jowar) prices moved up by 12.9% against last week to reach 9670 per MT. The prices were however lower than last year by 3.5%, but 14% higher than maize.

Barley prices slumped by 12.4% in the market yard, as rabi arrivals started in the market. Against last year, the prices were lower by 31%. In the SPOT market at Jaipur, prices moved lower by 0.5% to Rs.8500 per MT range, while in the futures market, the prices moved up by 1.5 – 2.2% to Rs.8800 – 8850 per MT for Apr/may delivery.

On CBOT the corn prices have moved up for May – Sept delivery by 2 – 2.3%. The prices were at $156 per MT for May, $160.22 per MT for Jul and 163.77 per MT for Sept delivery. FOB values for corn (US Gulf) were $174/175 per MT for Apr delivery, For May/July delivery prices are ranging from $175-178 per MT.

There are reports that Argentina farmers are ready for exports, by Government of Argentina is not ready to reduce export tax. This is likely to limit exports. A report from USDA, Argentina also suggests that corn area in 2009/10 may decline by 12%.

DDGS prices for SEA region are reported at $215 – 220 per MT. The demand for the product in almost all regions is increasing, which is increasing the prices. Also as demand of containers in up and supply very low, loading is affected.

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

Coarse grain prices high and low, demand is slow; Food recall procedure to be in place

Coarse grain prices high and low, demand is slow

Maize prices at the market yard moved down by about 3% to Rs.8050 per MT, but the prices have been higher by about 7.4% against last year, during the same time. Overall demand is slow for the domestic sector, specially poultry and starch and purchases are for immediate requirements rather than storage for a long period as rabi crop is due to arrive soon and in some cases arrivals have started.

In the futures market (NCDEX), prices were lower than last week by 1 – 1.5% for Mar – June deliveries. In the SPOT market as well the prices fell by about 1% against last week at all locations.

Pearl Millet (Bajra) prices have moved up by about 1% to reach Rs.8557 per MT at the market yard. Prices have remained higher than last year by 21% and 6% higher than maize at the market yard.

Sorghum (Jowar) prices slumped by 12.4% against last week to reach Rs.8563 per MT. Prices are higher than last year by 12% and also 6% higher than maize.

Barley prices also moved up by about 1% to average at Rs.8780 per Mt at the market yard. Prices are lower than last year by 14.6% In the futures market on NCDEX, the April delivery was slightly lower than last week to Rs.8600 per MT, while May delivery was close to Rs.8700 per MT. In the SPOT market (Jaipur), the prices were Rs.8572 per MT, down by 2.6% against last week.

On CBOT, corn prices moved up by 6.5 – 7.5% over last week. While mar delivery was $147.62 per MT, Sept close at $160 per MT. Delivered values of Corn in the SEA region would be close to $210/212 per Mt in April /May to $215/218 per MT in may/June.

Reports indicate FOB values of corn from India to be close to Rs.164/170 per MT and with the price differential, their could be increase in exports from India as prices remain stable or go down in the wake of increased Rabi arrivals. Also the prices of corn from Argentina (FOB) is somewhat similar to India, but the lower freight makes Indian corn attractive. In such a situation, with production in India also lower than last year by about 2 MMT, any increase in exports could lead to higher prices during the period Jun – Sep.

Even though the demand in poultry and starch may be lower, indications are that the consumption of corn/maize in food as snacks, corn on cob, Breakfast cereals and direct food use is on the increase and in order to arrive at a true consumption picture, the food consumption must be captured correctly.

Food recall procedure to be in place

The Food Safety and Standards Authority of India (FSASI) has initiated steps to set up a food recall system in place for domestic as well as imported foods, that could be unsafe. The

Main objectives of the recall procedure is to set up guidelines for the manufactures, wholesalers and importers so as their could be a rapid identification of unsafe food and removal of the same from the food chain, informing consumers about potentially hazardous products. The recall procedure must be written and there must be a follow-up action that the same situation is not repeated.

The full text of the proposed draft food recall procedures can be accessed at
http://fssai.gov.in/Recall.doc

One issue that is important here, and must be brought out is the use of certain food additives and residue limits. Some food additives are allowed in other countries, which are still not approved to be used in India. In addition residue limits are way low in India and may be higher in other parts of the world, which would mean that even those products that are deemed safe on country of origin, are to be considered hazardous in India and recalled. If is important that before such a procedure is put in place, Indian standards are harmonized with the world standards.

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

Coarse grain prices, moving with the tide; US Commodity Market

Coarse grain prices, moving with the tide

Maize prices moved up slightly this week as the demand for export grew. Average price at the market yard moved up by 1.6% to Rs.8300 per MT. The prices are higher than 9% against last year.

The final estimates for 2007/08 maize production are out and the production is estimated at 18.96 MMT against the earlier estimate of 19.31 MMT. While Kharif production is pegged at 15.11 MMT, Rabi is pegged at 3.85 MMT. The second estimates for 2008/09 crop estimate the production to be 17.04 MMT. Khraif production is estimated at 13.40 MMT against a target of 15.50 MMT and rabi is projected at 3.64 MMT, against a target of 4 MMT.

In the future markets the prices for Mar – Jun moved up by 1-2% per MT, Mar Rs.8280; Apr Rs.8335; May Rs.8420; Jun Rs.8560 per MT. On the Spot market though, the prices slumped by 0.5 – 1%. Nizamabad Rs.8111; Karimnagar Rs.8005; Davangere Rs.7734 per Mt. The prices are much lower than the Minimum Support Price (MSP) set by the government and reports are that atleast 0.5 MMT of corn has been purchased by the state agencies in Andhra Pradesh and Karnataka at the MSP, which will be sold later.

Prices as per the market are projected to go down in the near future due to lower demand and rabi crop coming into the market. But that may not be for a long period, as the lower prices will spur purchase and exports may continue. Based on dollar values, Indian corn is again the cheapest corn available, if that would spur exports over a medium term, prices may also stay stable.

Pearl Millet (Bajra), prices are similar to last week’s average (Rs.8460 – 8500 per MT). Prices are about 18% higher than last year and against maize, the prices are higher by 2%. Production for Pearl Millet in 2007/08 is estimated at 9.97 MMT. In 2008/09 the production is projected at 8.85 MMT against a target of 10 MMT.

Sorghum (Jowar) prices slumped by 2% to average at Rs.9780 per MT, The prices are higher than last year by 9.1% and against maize by 15.2%. Sorghum production in 2007/08 is estimated 7.93 MMT. In 2008/09 the production is estimated at 7.24 MMT against a target of 8.0 MMT. Khariff production is estimated at 3.06 MMT, while Rabi is projected to be 4.18 MMT.

Barley prices moved up by about 3.2% against last week to average Rs.8700 per MT at the market yard. The prices are lower than last year’s by 18.2%. Barley production in 2007/08 is estimated at 1.20 MMT. In 2008/09 the production is projected to be 1.45 MMT against a target of 1.50 MMT.

Barley prices on NCDEX were reported lower than last week, by 6.68% for April delivery, while in the Spot market at Jaipur, the prices were higher by 3.5% to Rs.8800 per MT.

US Commodity Market

The prices of Corn on CBOT moved up slightly from 0.6 - $1.0 per MT for Mar – September deliveries. Pricing were Mar $138.81; May $142.27; July $146.05; Sept $149.28 per MT. FOB values for corn (US Gulf) were $162 – 163 per MT for Mar to June delivery. Reports are, imported corn, specially US is priced at about $210/212 per MT.

Sorghum values on FOB basis (US Gulf) are still about $10 cheaper than corn at $152/154 per MT, which would lead to increased sales and usage on sorghum in some traditional corn markets and it would compete with corn from other sources.

Feed wheat is still the cheapest grain available on the market and is trading in SEA and is a competitive product. Swine farmers in some areas may shift to feed wheat, but poultry, especially broiler integrators are likely to stay with corn as it is the only source of energy.

DDGS prices are currently at $212/215 per MT delivered to Thailand, Malaysia and Vietnam. Over the next couple of weeks the prices may go up, only because of the slow availability on containers in USA, a sure sign that US is receiving less stocks/goods from other parts of the world, specially SEA region, which was the major exporter of products, including auto parts, textiles, foods, handicrafts, furniture etc to USA.

The latest trial using DDGS in Chile, it has been proved again that DDGS in dairy feeds not only reduced the cost of of feeding but also increased compoents in milk (protein) and production of milk in summer as well as winter, giving higher margins to the dairy farmers.

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