Commodity prices jump on monsoon deficiency
Maize prices moved up at the market yard this week by 2.2% to Rs.9000 per MT. Prices were lower than last year at the market yard by 1.3%. Prices moved lower in Rajasthan, Tamil Nadu and Uttar Pradesh by 3%,1% and 4% to Rs.9650, Rs.8600 and Rs.8700 per Mt respectively. Corn prices moved up in Gujarat, Karnataka and Maharashtra by 13%, 7% and 2.6% to Rs.10770, Rs.9250 and Rs.9130 per MT respectively. Prices in Andhra Pradesh remained stable.
In the futures market maize prices moved up by 5 – 8 %. Aug delivery Rs.9600 per MT , up 4.8%; Sept Rs.9880 per MT, up 6.7%; Oct Rs.9450 per MT, up 8.7%. This could be in anticipation that he production would be lower and also harvest delayed due to late sowing. In the Spot markets the prices remained more or less stable in Nizamabad and Karimnagar in Andhra Pradesh, but moved up to Rs.8518 per MT in Davangere, adding 1.33% to the tally.
Pearl Millet prices moved down by 1% to Rs.9120, but were higher than last year by 11.8%. Against maize, prices were higher by 1.7%.
Sorghum prices also moved up by 8.6% to Rs.12820 per MT at the market yard. Prices were higher than last year by 18.6% and against maize higher by 30%.
Barley prices too moved up by 5.3% at the market yard to Rs.8000 per MT. Prices were lower than last year by 36.5%.
The futures market saw a sudden spurt in the prices adding almost 5-10% to the tally against last week. Sept Rs.9730, up 10.69%; Oct Rs.9882, up 10.53%; Dec Rs.9600 per MT, up 5.12%. At Jaipur spot market the prices were up by 4.8% to Rs.8654 per MT.
Last week was a major setback for Indian agriculture. For the period Jul 30 to Aug 5, 2009, the rain deficiency was 64%. The overall deficiency on monsoon as on Aug 5, 2009 for the period Jun 1 – Aug 5, 2009 stands at 25%. Major corn producing areas, Andhra Pradesh, Maharashtra, Chattisgarh, Uttar Pradesh, Rajasthan, North Interior Karnataka, Madhya Pradesh practically did not received any rainfall (def of 80 – 99%), in the crucial week. In some states like Karnataka, sowing was done only in last week of July. Of the 36 meteorological divisions, 27 divisions received deficient or scanty rainfall. In such a situation when the topsoil and subsoil moisture both are under stress and with a dry spell predicted for the next 2 days (revival after 2 days as per the press release from IMD), there is likelihood of a major productivity loss. Press reports suggest a production loss in states on Andhra Pradesh, Rajasthan and Uttar Pradesh anywhere between 20-30%. Reports are that Maharahstra has also declared drought is some districts and more districts will be added to the list.
The soybean situation is also critical and even though the total area under soybean is higher than last year by almost 3.3%, but with the dip in monsoon and almost dry conditions in Madhya Pradesh the situation may not be as good as previously thought.
Corn futures on CBOT moved lower this week. Prices were down by 3 - 5%. Sept $126.60 per MT, down 5.24%; Dec $128.49, down 3.73%; Mar 2010 $133.69, down 4.06% gainst last week prices. The FOB values for corn for US Gulf and PNW were also dwn to $158/159 per MT and $174-181 per MT respecively for the next 3 months. Sorghum was indicated at $154 per MT (FOB US Gulf), about 2.5% lower than corn. DDGS prices continued to be stable at $188/190 per MT CNF for SEA regions, FOB value (US gulf) were indicated at $129 per MT.
Freight rates have shown a slight downward trend last week to $57 per MT for US Gulf - Japan and $30 per MT for PNW- Japan. Freight rates from Argentina/Brazil to China were also reported lower at $42/43 per MT.
Barley prices in US were reported to be stable at $200 per MT (FOB US gulf) and Corn Gluten Meal prices moved up slightly to $590 per MT (FOB US Gulf).
Livestock the best option to supplement farm incomes
In these trying times, when farmers are looking skyward, hoping for a miracle, possibly livestock would be an only option provide gainful employment and returns to the farmers in India. GOI and the state governments are already geared towards this and the procurement price of milk in Pune area has been increased by Rs.2.50 per liter. The sale price of milk has also increased by Rs.2.0 per liter. Mother dairy has also increased the price of milk by Rs.1.00per liter for the consumers in Delhi, due to increase in procurement price. The increased procurement price will give an incentive to the farmer to feed the animals with balanced rations to get more milk from the animals. The deficiency is rainfall has also depleted the availability of green fodder on which some of the farmers were dependent. The deficiency in milk procurement is about 20% in Maharashtra. North India too is reeling under the same problem and the procurement as per Govt report is down by 15%.
In order to increase the returns for the buffalo farmers, GOI through NABARD has created a Rs.3 billion ($61 million) fund, which will provide interest free loans to farmers to keep male buffalo calves, which after attaining a particular weight could be sold to the large animal slaughter houses. Meat of buffalo males would then be exported. U S Grains Council had started a project in India in 1996 in collaboration with NDRI Karnal and the average weight gain obtained by feeding the males was 1.1 kg/day in a period of 8 months. The males were fed with high grain rations, containing 35% corn. Reports available suggest that farmers and enterprises will be able to avail this loan for 10 animals or more.
Amit Sachdev
India Representative
U S Grains Council
Email: usgcindia@gmail.com
Maize prices moved up at the market yard this week by 2.2% to Rs.9000 per MT. Prices were lower than last year at the market yard by 1.3%. Prices moved lower in Rajasthan, Tamil Nadu and Uttar Pradesh by 3%,1% and 4% to Rs.9650, Rs.8600 and Rs.8700 per Mt respectively. Corn prices moved up in Gujarat, Karnataka and Maharashtra by 13%, 7% and 2.6% to Rs.10770, Rs.9250 and Rs.9130 per MT respectively. Prices in Andhra Pradesh remained stable.
In the futures market maize prices moved up by 5 – 8 %. Aug delivery Rs.9600 per MT , up 4.8%; Sept Rs.9880 per MT, up 6.7%; Oct Rs.9450 per MT, up 8.7%. This could be in anticipation that he production would be lower and also harvest delayed due to late sowing. In the Spot markets the prices remained more or less stable in Nizamabad and Karimnagar in Andhra Pradesh, but moved up to Rs.8518 per MT in Davangere, adding 1.33% to the tally.
Pearl Millet prices moved down by 1% to Rs.9120, but were higher than last year by 11.8%. Against maize, prices were higher by 1.7%.
Sorghum prices also moved up by 8.6% to Rs.12820 per MT at the market yard. Prices were higher than last year by 18.6% and against maize higher by 30%.
Barley prices too moved up by 5.3% at the market yard to Rs.8000 per MT. Prices were lower than last year by 36.5%.
The futures market saw a sudden spurt in the prices adding almost 5-10% to the tally against last week. Sept Rs.9730, up 10.69%; Oct Rs.9882, up 10.53%; Dec Rs.9600 per MT, up 5.12%. At Jaipur spot market the prices were up by 4.8% to Rs.8654 per MT.
Last week was a major setback for Indian agriculture. For the period Jul 30 to Aug 5, 2009, the rain deficiency was 64%. The overall deficiency on monsoon as on Aug 5, 2009 for the period Jun 1 – Aug 5, 2009 stands at 25%. Major corn producing areas, Andhra Pradesh, Maharashtra, Chattisgarh, Uttar Pradesh, Rajasthan, North Interior Karnataka, Madhya Pradesh practically did not received any rainfall (def of 80 – 99%), in the crucial week. In some states like Karnataka, sowing was done only in last week of July. Of the 36 meteorological divisions, 27 divisions received deficient or scanty rainfall. In such a situation when the topsoil and subsoil moisture both are under stress and with a dry spell predicted for the next 2 days (revival after 2 days as per the press release from IMD), there is likelihood of a major productivity loss. Press reports suggest a production loss in states on Andhra Pradesh, Rajasthan and Uttar Pradesh anywhere between 20-30%. Reports are that Maharahstra has also declared drought is some districts and more districts will be added to the list.
The soybean situation is also critical and even though the total area under soybean is higher than last year by almost 3.3%, but with the dip in monsoon and almost dry conditions in Madhya Pradesh the situation may not be as good as previously thought.
Corn futures on CBOT moved lower this week. Prices were down by 3 - 5%. Sept $126.60 per MT, down 5.24%; Dec $128.49, down 3.73%; Mar 2010 $133.69, down 4.06% gainst last week prices. The FOB values for corn for US Gulf and PNW were also dwn to $158/159 per MT and $174-181 per MT respecively for the next 3 months. Sorghum was indicated at $154 per MT (FOB US Gulf), about 2.5% lower than corn. DDGS prices continued to be stable at $188/190 per MT CNF for SEA regions, FOB value (US gulf) were indicated at $129 per MT.
Freight rates have shown a slight downward trend last week to $57 per MT for US Gulf - Japan and $30 per MT for PNW- Japan. Freight rates from Argentina/Brazil to China were also reported lower at $42/43 per MT.
Barley prices in US were reported to be stable at $200 per MT (FOB US gulf) and Corn Gluten Meal prices moved up slightly to $590 per MT (FOB US Gulf).
Livestock the best option to supplement farm incomes
In these trying times, when farmers are looking skyward, hoping for a miracle, possibly livestock would be an only option provide gainful employment and returns to the farmers in India. GOI and the state governments are already geared towards this and the procurement price of milk in Pune area has been increased by Rs.2.50 per liter. The sale price of milk has also increased by Rs.2.0 per liter. Mother dairy has also increased the price of milk by Rs.1.00per liter for the consumers in Delhi, due to increase in procurement price. The increased procurement price will give an incentive to the farmer to feed the animals with balanced rations to get more milk from the animals. The deficiency is rainfall has also depleted the availability of green fodder on which some of the farmers were dependent. The deficiency in milk procurement is about 20% in Maharashtra. North India too is reeling under the same problem and the procurement as per Govt report is down by 15%.
In order to increase the returns for the buffalo farmers, GOI through NABARD has created a Rs.3 billion ($61 million) fund, which will provide interest free loans to farmers to keep male buffalo calves, which after attaining a particular weight could be sold to the large animal slaughter houses. Meat of buffalo males would then be exported. U S Grains Council had started a project in India in 1996 in collaboration with NDRI Karnal and the average weight gain obtained by feeding the males was 1.1 kg/day in a period of 8 months. The males were fed with high grain rations, containing 35% corn. Reports available suggest that farmers and enterprises will be able to avail this loan for 10 animals or more.
Amit Sachdev
India Representative
U S Grains Council
Email: usgcindia@gmail.com
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