Coarse grains prices show strength
Maize prices moved up again this week by 1.3% to Rs.9200 per MT on an average at market yard. The prices are higher than last year by 6.8%. At the state level, while prices are stable at MSP (Rs.8400 per MT) in Andhra Pradesh, they have risen steadily in Gujarat by 4.5% to Rs.10450 per MT; Rajasthan by 5.3% to Rs.9930 per MT; Uttar Pradesh by 7.6% to Rs.9850 per MT. Prices were down by 5.9% in Tamil Nadu to Rs.8550 per MT. In Maharashtra markets the prices was reported at Rs.8700 per MT. Reports are that arrivals have started. Punjab local is available at Rs.9900 per MT. Quality issues have been reported at some locations where wet maize is in the market. The average price of maize for Oct 2009 was 9084 per MT, 1.5% lower than Sept 2009, but 10.84% higher than Oct 2008.
On the futures market prices have moved up by 2 – 4%. For the closest month Nov, prices moved up by 2.2% to Rs.9660 per MT; Dec up 2.7% to 9770 per MT; Jan up 3.4% to Rs.10210 per MT and Feb up 4.2% to Rs.10380 per MT. In the spot market the price in Nizamabad was up by 2% to Rs.9225, but in Karimnagar and Davangere prices moved lower by 0.4% and 0.8% to Rs.8770 per MT and 8592 per MT respectively.
Pearl Millet prices have risen 14% this week to Rs.9950 per MT. Arrivals are good, but quality of the grain is an issue in Haryana, Punjab and Uttar Pradesh. Against last year, pries are up by 23%. Pearl Millet can be used in dairy/poultry rations, but the current price is higher than maize by 7.6%. making it difficult for the farmers to use the same. Average prices of Pearl Millet in Oct 2009 was Rs.9491 per MT, 4.85% higher than Sept 2009 and 26% higher than Oct 2008.
Sorghum price moved lower by 6% at the market yard to Rs.11680 per MT against last week, but remained higher than last year by 13.5%. Against maize the price is higher by 21%. The average price of Sorghum for Oct 2009 was Rs.11932 per MT, 1.5% lower than Sept 2009, but 24.8% higher than Oct 2008.
Barley prices have also moved up by 1.2% this week to Rs.7933 per MT. Prices remained lower than last year by 16.7%. The average prices of barley at the market yard for Oct 2009 was Rs.7856 per MT, similar to Sept 2009 price and 16.74% lower than Oct 2008 prices.
On the futures market prices moved up by 6 – 7%. For Dec contract the prices are up by 6.4% to 10150 per MT and for April up by 7.4% to Rs.10600 per MT. In the spot market the prices moved up by 10% to Rs.9454 per MT.
Corn prices ended lower this week as the weather is expected to be dry next week and harvest will proceed. Near month contract for Dec was down by 7.6% to $144.55 per MT. For Mar contract prices were down 7% to $149.59 per MT and for May the prices were down by 6.6% to $153.37 per MT. The FOB value too was down and indicated at $175-177 per MT for Nov – Feb for US Gulf, while for FOB PNW, prices were indicated at $200 per MT for the same window. Sorghum prices on FOB basis US gulf were indicated at $177/180 per MT.
DDGS FOB US Gulf prices are indicated at $ 166 for Nov; 4160 for Dec and $155 for Jan delivery. The reason being attributed to the drop is prices is the good quantum of corn and lower prices this week. The demand remains strong and the CNF prices are indicated at $225 per MT for SEA region.
The freight markets are also getting strengthened with US Gulf-Japan prices moving up by a dollar to $66 per MT. Argentina-Brazil to China freight rates have also been reported higher at $49-51 per MT.
Food grain production to be hit
Centre for Monitoring Indian Economy (CMIE) has projected that the Khariff Food Grain production for 2009/10 will be down to 98 MMT against 117.7 MMT last year. USDA has also projected that the rice production for the year 2009/10 will be down by 16-17 MMT.
In 2008/09, as per the 4th Advance Estimate by GOI, the food grain production in Khariff for Rice 84.58 MMT; Pulses 4.78 MMT, Pearl Millet (Bajra) 8.83 MMT; Sorghum (Jowar) 3.10 MMT; Maize 13.90 MMT; Ragi 2.06 MMT and Small Millets 0.45 MMT, making a total of 117.7 MMT. Rice constituted 71.86% of the total food grain package and if the production is down by 20% against last year to 68 MMT, as per estimates it would be 69.38% of the Khariff Food Grain production. The rest of food grains in 2008/09 totaled 33.12 MMT and in 2009/10 the total is expected to be 30 MMT, down 9.42% against last year. Which one will shall bear the brunt of the loss is still being counted, but there is no doubt that production of almost all food grains (pulses, coarse cereals) is hit. Reports indicate losses in Uttar Pradesh and Rajasthan due to drought, while in Andhra Pradesh and Karnataka the loss is due to floods and excessive rains.
Amit Sachdev
India Representative
U S Grains Council
E Mail: usgcindia@gmail.com
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