Lower prices as on date, future prices are higher
Maize prices on an average dropped by 3.4% to reach Rs.9000 ($194.6) per MT at the market yard. The prices are higher than last year by 12.2%. While prices were reported to be down in Andhra Pradesh by 0.4% to Rs.8540 ($184.7) per MT; Tamil nadu by 2.6% to Rs.8633 ($186.6) per MT. Prices are stable in Karnataka at Rs.8400 ($181.6) and Rajasthan. Prices are reported to be up in Gujarat by 1.2% to Rs.10050 ($217) per MT; Maharashtra by 2.7% to Rs.8650 ($187) per MT and Uttar Pradesh by 14.6% to Rs.10583 ($228.8) per MT. The deliveries in production centers have increased specially in Kartanaka and Maharasthtra
In north India, delivered prices are reported at Rs.11200 ($242) per MT. Corn is available from Karnataka (loaded) at Rs.8650 ($187) per MT.
On NCDEX, prices rallied higher than last week for two contracts Dec and Mar 2010 by 0.5% and 0.8% to Rs.9910 ($214) per MT and Rs.10900 ($235) per MT. respectively. Jan and Feb contracts were stable at Rs.10220 ($221) per MT and Rs.10525 ($228) per MT respectively. In the spot markets prices have moved up by the end of the week and were up by approximately 2 – 2.5% across the board. Nizamabad up 2.4% to RS.9649 ($208) per MT; Karimnagar up 2.12% to Rs.9599 ($207) per MT, and Davangere up 2.29% to Rs.9370 ($203) per MT. On MCX as well, prices moved higher for Dec contract by 0.2% to Rs.9870 ($213) per MT. In the spot exchange (Nizamabad) prices moved up by 4.2% to Rs.9645 ($208) per MT, similar to NCDEX spot price at Nizamabad.
Pearl Millet (Bajra) prices have moved up by 2.5% at the market yard to 10,350 ($223.7) per MT and prices are also higher than last year by 25.3%, Against maize prices are higher by 13.2%. Bajra is a staple for people in Rajasthan, parts of Uttar Pradesh and some parts of Haryana. With production down by 34% and no more crop in Rabi, the prices are likely to remain higher for the remaining year.
Sorghum (Jowar) prices corrected and are down by 19.3% to Rs.11110 ($240) per MT. Prices are higher than last year by 17.3% and also higher than maize by 19.1%. Sorghum is a staple for people in Maharashtra, parts of Kartanaka, Andhra Pradesh and with the production down by about 18%. With production targeted at 3.90 MMT in Rabi, the overall deficit of 11% will remain. With the demand of white sorghum as food and as health snack/food, increase in prices cannot be ruled out. As t he harvest was delayed, the stock arrivals have increased now, thus the prices are under pressure.
Barley prices moved lower by 20% to Rs.8400 ($181) per MT. The price is lower than last year by 10.3%. In the futures market, prices remained stable at Rs.9900 ($214) per MT for Dec contract and moved up for April contract by 1.42% to Rs.10650 ($230) per MT and lower for May by 0.75% to Rs.10510 ($227) per MT. In the spot market of Jaipur, prices are higher by 0.5% to Rs..9469 ($205) per MT.
Multi-Commodity Exchange of India (MCX) has launched the exchange of futures for physicals (EFP) transaction facility in 12 commodities. Only Chana (Chick Pea) and Wheat are offered in the facility from the agricultural commodities and if maize can be offered, it will certainly help the end users in India and lock the prices. An EFP transaction is an exchange of futures contracts for a physical commodity transaction between two market participants.
GOI has acknowledged a deficit in Pulses (3.6 MMT), sugar (7 MMT) and the food inflation for the week Nov 21, 2009 is up to 17.5% against last year. If one looks at the grains package, of all the food grains in the market, maize/corn is the cheapest at Rs.9200 – 11200 ($199 – 242) per MT depending on the station. While all other grains Wheat, Rice are higher. Wheat at Rs.15000 ($324) per MT and rice at Rs.35000 ($756) per MT in the retail market. For the people in rural belt, if corn is available cheaper than other grains, it will be used as food.
With rice production down, availability of rice is an issue and layer sector is likely to look at other grains and with Pearl Millet and sorghum availability poor, pressure will be on corn.
International markets move lower and accept biotech
In the US, price of Corn on CBOT was down by about 6% for the three contracts, Dec down 6% to $147 per MT, Mat down 6% to $152.9 per MT and May down 5.89% to $157 per MT. The FOB rates for gulf and PNW were indicated at $179-182 per MT and $185-182 per MT for Dec to Feb period. Sorghum is indicated higher than corn at $191-189 for the same period for FOB Gulf.
Last week, EU cleared some GM traits and this would possibly allow flow of Soybean Meal, DDGS and Corn Gluten Meal containing these traits into EU. Turkey has banned imports of ingredients containing GM traits, and this had caused prices of energy and protein ingredients to increase. But now the government has allowed imports of all those ingredients, which have been contracted. Turkey was importing GM commodities and traits that were approved in country of origin for food and feed were allowed. This had helped the industry keep its prices in check.
China is one of the largest importers of DDGS in the region and it is being used consistently in dairy, poultry and swine feeds. It helps in reducing the pressure on corn and also to SBM to some extent. DDGS prices in US are indicated $171 (FOB US Gulf) and CNF prices to SEA region are indicated at $240-246 per MT for 36% profat product. The demand is steady in the domestic as well as international markets and most feed manufacturers in the would are now tuned to using DDGS as part of the ingredient mix, which helps in keeping the price of feed in check, without compromising on the quality of feed.
In the freight markwt, prices were somewhat lower for the Gulf – Japan and PNW – Japan benchmark by $3 per MT to $69 and $41 per MT respectively.
Amit Sachdev
India Representative
U S Grains Council
Email: usgcindia@gmail.com
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