Coarse grain prices firm, demand to increase
Maize prices were down by about 1.6% this week on an average to Rs.8300 per MT at market yard (loose sales). This is due to increased arrivals at the market yard or the rabi crop, in Bihar, Andhra and Karnataka. The prices though are higher than last year prices at market yard by 14.7%.
On NCDEX, maize prices moved up by 1-3.6%, while May contract gained 0.9% to reach Rs.8910 per MT, August contract was close to Rs.9480 per MT, gaining 3.6%. SPOT market prices also moved up. Nizamabad was higher by 1.9% against last week to Rs.8513 per MT, Also Davangere was higher by 0.3% at Rs.7922 per MT.
Pearl Millet (Bajra) prices moved down by 1% to Rs.9000 per MT range at the market yard. Prices are higher than last year by 19.1% and 8.1% higher than maize on an average. In North India there are still chances that some amount of pearl millet will used in broiler/layer rations, but not in South India as the delivered price will be much higher than maize.
Sorghum (Jowar) prices moved by by 4.8% this week, to reach Rs.9795 per MT. Against last year though, prices are lower by about 0.7%, but higher than maize by 15.5%. In current scenario and prices, using sorghum in poultry rations will not work.
Barley prices have moved lower on average by 2.6% to Rs.7850 per MT range. Prices are lower than last year by 21.7%. With increased production and availability, lower exports forecast for barley, usage in cattle feed would be higher. Also farmers at a later stage may not sell so much barley, as returns are much lower than last year.
On the futures market, prices dropped by 1 – 2%. May contract closed 2% lower at Rs.9628 per MT. Spot prices at Jaipur market was 0.88% lower thn last week at Rs.9091 per MT.
On CBOT corn remained stable at last week's level, but within the week the prices did move up and down due to weather forecast and its affect on corn plantings. While dry weather would mean a better planting and brought the prices down, wet weather forecast helped corn to gain on CBOT. By the end of the week, the prices were back to last week’s level.
Reports indicate that the corn planting is going slow and only 5% of the planting is complete against 14% for the last 5 year average, but it is 1% higher than last year’s planting of 4% at the same time.
Corn prices on FOB basis, US gulf are similar to last week at $170/171 per MT. FOB PNW for Apr is down to $177 per MT, while for June is higher at $187 per MT as per USGC market perspective report.
Prices of DDGS have moved up to $235-238 per MT for SEA markets, amid increased demand and possible replacement with high prices SBM in the region. Trials done in Australia on DDGS usage in Australia confirm the fact that DDGS is a good product and c be used in dairy rations upto 20%, without any adverse affect on milk production, and if it is competitive, substantial savings could be done by incorporating the co-product in dairy rations.
Freight markets too are stable with US Gulf-Japan freight at $42 per MT, PNW-Japan at 23.5 per MT. Brazil/Argentina – China freight is reported at $38-39 per MT.
Reports from other corn markets indicate that Argentina has issued export licenses for 1.185 MMT of corn, and in Brazil there is a slowdown in exports. Reports also indicate that Brazil farmers may be shifting to sugarcane against corn due to high ethanol demand. A new FAO report (Crop prospects and food situation. April 2009) indicates that India would produce a record cereal crop in 2008, the coarse cereal production would be lower at 37.7 MMT in 2008, against 40.5 MMT in 2007. The production in 2009 is estimated to fall in 2009 to 35.6 MMT.
Biotech gaining acceptance in Europe
Last week there were reports that Germany has banned the planting of pest resistant corn and that the biotech company had filed a suit against the country (Germany) as the ban was illegal as EU has approved the planting of the trait in Europe. Other countries that have banned the planting biotech crops include France, Austria, Greece, Luxemburg and Hungary. But there are countries within EU and also Scandinavian countries that have given approvals for plantings or filed trials of biotech corn or barley. These countries include Spain and Romania. Denmark too is testing herbicide tolerant corn as per reports.
Some recent consumer surveys in Europe and UK indicate that people are not so much skeptical about GM use as they were earlier.
A poll conducted by Grocery Distribution in the UK, indicate that GM technologies are seen as an important tool towards mitigation of increasing global food shortages and of responding to food production challenges posed by climate change:
* More than half (52 %) of British consumers regard this technology as instrument against increasing global food shortages. While only 13 % of respondents expressed disagreement with this idea.
* Nearly half (47 %) of respondents regard GM crops to be a solution for increasingly extreme weather conditions and for combating plant diseases. While only 12 % of those polled did not share this opinion.
In another study “Consumerchoice", funded by European Commission, indications are that in countries where GM products were available in shops like in the Czech Republic, the Netherlands, Poland and Spain, only 20 % of buyers actively avoided such products. Similar results were obtained in a study conducted by the Institute of Grocery Distribution in the UK in 2008. More than half (53 %) of respondents claimed not to think about GM when shopping. Only 21 % claimed to check food labels to ensure that food was non-GM.
Surveys and shopping trials make few things clear.
1. In actual shopping scenarios, low-priced GM products are picked up and increase market share.
2. That 80% of consumers surveyed do not actively avoid GM products when shopping,
3. GM products having significant environmental or consumer benefits were rated positive by more than half the consumers and would be bought
4. That the acceptance of the new technology has increased steadily since 1999.
But there is a need to provide more information on the benefits of GM to the general population rather than issue a directive and do not allow the technology to be used, when it can address the food shortage situation and also lower the commodity prices. (detailed report on GMO compass).
Maize prices were down by about 1.6% this week on an average to Rs.8300 per MT at market yard (loose sales). This is due to increased arrivals at the market yard or the rabi crop, in Bihar, Andhra and Karnataka. The prices though are higher than last year prices at market yard by 14.7%.
On NCDEX, maize prices moved up by 1-3.6%, while May contract gained 0.9% to reach Rs.8910 per MT, August contract was close to Rs.9480 per MT, gaining 3.6%. SPOT market prices also moved up. Nizamabad was higher by 1.9% against last week to Rs.8513 per MT, Also Davangere was higher by 0.3% at Rs.7922 per MT.
Pearl Millet (Bajra) prices moved down by 1% to Rs.9000 per MT range at the market yard. Prices are higher than last year by 19.1% and 8.1% higher than maize on an average. In North India there are still chances that some amount of pearl millet will used in broiler/layer rations, but not in South India as the delivered price will be much higher than maize.
Sorghum (Jowar) prices moved by by 4.8% this week, to reach Rs.9795 per MT. Against last year though, prices are lower by about 0.7%, but higher than maize by 15.5%. In current scenario and prices, using sorghum in poultry rations will not work.
Barley prices have moved lower on average by 2.6% to Rs.7850 per MT range. Prices are lower than last year by 21.7%. With increased production and availability, lower exports forecast for barley, usage in cattle feed would be higher. Also farmers at a later stage may not sell so much barley, as returns are much lower than last year.
On the futures market, prices dropped by 1 – 2%. May contract closed 2% lower at Rs.9628 per MT. Spot prices at Jaipur market was 0.88% lower thn last week at Rs.9091 per MT.
On CBOT corn remained stable at last week's level, but within the week the prices did move up and down due to weather forecast and its affect on corn plantings. While dry weather would mean a better planting and brought the prices down, wet weather forecast helped corn to gain on CBOT. By the end of the week, the prices were back to last week’s level.
Reports indicate that the corn planting is going slow and only 5% of the planting is complete against 14% for the last 5 year average, but it is 1% higher than last year’s planting of 4% at the same time.
Corn prices on FOB basis, US gulf are similar to last week at $170/171 per MT. FOB PNW for Apr is down to $177 per MT, while for June is higher at $187 per MT as per USGC market perspective report.
Prices of DDGS have moved up to $235-238 per MT for SEA markets, amid increased demand and possible replacement with high prices SBM in the region. Trials done in Australia on DDGS usage in Australia confirm the fact that DDGS is a good product and c be used in dairy rations upto 20%, without any adverse affect on milk production, and if it is competitive, substantial savings could be done by incorporating the co-product in dairy rations.
Freight markets too are stable with US Gulf-Japan freight at $42 per MT, PNW-Japan at 23.5 per MT. Brazil/Argentina – China freight is reported at $38-39 per MT.
Reports from other corn markets indicate that Argentina has issued export licenses for 1.185 MMT of corn, and in Brazil there is a slowdown in exports. Reports also indicate that Brazil farmers may be shifting to sugarcane against corn due to high ethanol demand. A new FAO report (Crop prospects and food situation. April 2009) indicates that India would produce a record cereal crop in 2008, the coarse cereal production would be lower at 37.7 MMT in 2008, against 40.5 MMT in 2007. The production in 2009 is estimated to fall in 2009 to 35.6 MMT.
Biotech gaining acceptance in Europe
Last week there were reports that Germany has banned the planting of pest resistant corn and that the biotech company had filed a suit against the country (Germany) as the ban was illegal as EU has approved the planting of the trait in Europe. Other countries that have banned the planting biotech crops include France, Austria, Greece, Luxemburg and Hungary. But there are countries within EU and also Scandinavian countries that have given approvals for plantings or filed trials of biotech corn or barley. These countries include Spain and Romania. Denmark too is testing herbicide tolerant corn as per reports.
Some recent consumer surveys in Europe and UK indicate that people are not so much skeptical about GM use as they were earlier.
A poll conducted by Grocery Distribution in the UK, indicate that GM technologies are seen as an important tool towards mitigation of increasing global food shortages and of responding to food production challenges posed by climate change:
* More than half (52 %) of British consumers regard this technology as instrument against increasing global food shortages. While only 13 % of respondents expressed disagreement with this idea.
* Nearly half (47 %) of respondents regard GM crops to be a solution for increasingly extreme weather conditions and for combating plant diseases. While only 12 % of those polled did not share this opinion.
In another study “Consumerchoice", funded by European Commission, indications are that in countries where GM products were available in shops like in the Czech Republic, the Netherlands, Poland and Spain, only 20 % of buyers actively avoided such products. Similar results were obtained in a study conducted by the Institute of Grocery Distribution in the UK in 2008. More than half (53 %) of respondents claimed not to think about GM when shopping. Only 21 % claimed to check food labels to ensure that food was non-GM.
Surveys and shopping trials make few things clear.
1. In actual shopping scenarios, low-priced GM products are picked up and increase market share.
2. That 80% of consumers surveyed do not actively avoid GM products when shopping,
3. GM products having significant environmental or consumer benefits were rated positive by more than half the consumers and would be bought
4. That the acceptance of the new technology has increased steadily since 1999.
But there is a need to provide more information on the benefits of GM to the general population rather than issue a directive and do not allow the technology to be used, when it can address the food shortage situation and also lower the commodity prices. (detailed report on GMO compass).
Amit Sachdev
India Representative
U S Grains Council
usgcindia@gmail.com
