SEASON"S GREETINGS AND A HAPPY NEW YEAR.
May the new year bring prosperity, peace and happiness
Maize prices up in open market, slip in future markets
New draft rules for registration and licensing for food businesses
3. Milk and Milk Products Order, 1992
4. Vegetable Oil Products (Control) Order, 1947
5. Edible Oils Packaging (regulation ) Orders, 1998
6. The solvent Extracted Oil, De oiled Meal and Edible flour (Control) Order, 1967
7. Meat Food Products Orders, 1973
Prices stable for maize, but higher that last year, coarse cereals prices made a dent; DDGS a major livestock feed ingredient
Maize prices moved up by 2.8% on the average at the market yard for pan India to Rs.9580 per MT. The prices are 15% higher than last year at this point. Prices remained stable in Maharashra and Karnataka from where stocks are moving to other parts of the country. Prices in Andhra were slightly lower by 0.6% to Rs.8550 per MT, while in all other states average prices moved up. Gujarat up by 2% to Rs.10140 per MT; Rajasthan up by 1.3% to 9950 per MT; Tamil nadu up by 0.76% to Rs. 8650 per MT and Uttar Pradesh up by 5.5% to Rs.10233 per MT. While the overall availability may be good, an average sample of maize contains more of small grains as per market reports.
Demand from starch units is good and with Government of Maharashtra clearing maize, Sorghum and pearl millet), the demand is likely to rise further within one year one would be able to see use of 0.5 – 0.7 MMT of grains used in the sector. Already plants in Andhra Pradesh and Karnataka are using maize to produce alcohol. While NGO’s have opposed the move, as coarse cereals are staple for the resource poor farmers and the diversion will increase the price, which many experts believe is good for the farmers.
On NCDEX the prices are lower than last week by 1.5 - 1.7%, probably as more stocks are in the market and Rabi sowing is a little better. Jan contract was Rs.9930 per Mt, down 1.68%; Feb down 1.54% to Rs.10190; Mar down 1.51% to Rs.10410 per Mt. Only April contract was up marginally by 0.14% to Rs.10710 per MT. In the spot markets as well, prices were down slightly, Nizamabad down 1.1% to Rs.9472 per MT; Karimnagar down 1.47% to Rs.9222 per Mt. Prices in Davangere were up by 0.12% to Rs.9362 per MT.
Pearl Millet prices remained stable at RS.9900 per MT and were higher than last year by 23.3%. Against maize, prices are higher by 3.2%.
Sorghum prices also have moved up by 3.4% to Rs.13,200 per MT and are higher than last year by 32%. Prices are higher than maize by 27.4%.
Barley prices at the market yard moved lower by 6.2% to Rs.8420 and were also down against last year by 7.5%. In the futures as well as the spot market, prices moved lower. April down 0.11% to 10208 per MT; May down 0.61% to 10398 per Mt. Jaipur down 0.43% to Rs.9409 per MT.
As on Dec 11, 2009, while overall wheat crop was sown in more area in 2009 (21.728 mill hac) than in 2008 (21.602 mill hac), repots were that the sowing was up in Madhya Pradesh and down in other key states of Punjab, Haryana, Uttar Pradesh, Maharashtra and Gujarat. Barley area is reported to be up to 0.623 mill hac in 2009 from 0.58 mill hac, an increase of 7.4%. Area under sorghum is reported to be down to 4.347 mill hac in 2009, against 4.791 mill hac in 2008, loss of 9.2%. Maize/Corn area is up slightly (3.4%) to 0.73 mill hac in 2009 against 0.706 mill hac in 2008. Area under all oilseeds in projected to be down by 7.19% to 7.7 mill hac in 2009. Area under pulses/lentils is expected to be up 2.3% to 11.19 mill hac in 2009 against 10.93 mill hac in 2008.
For the week ended Dec 5, 2009, the food inflation has hit a 11 year high of 19.95%, mostly due to lower production of food crops and higher demand. GOI has assured that in case there is a requirement, imports would be stepped up for all food products.
On CBOT, corn prices settled lower for the near contract May 2010, down 1.68% to $156.82 per Mt. For May 10 as well prices were down by 1.68% to $160.77 per Mt. July contract closed at $164.32 per MT. Prices are down as the market is entering the holiday mode and next 10 days would be easy on the market. FOB gulf prices are indicated at $180 per MT for Feb to April and FOB PNW are indicated at $199-206 per MT for Jan – April 2010. Sorghum was indicated at $184-186 per MT for Jan – Mar 2010.
DDGS is finding more users domestically and also in other parts of the world. Livestock users have excepted DDGS as a product of choice in livestock, poultry, fish and swine rations all over the world. For the period Jan – Oct 2009, US has exported 4.56 MMT of DDGS, 17.34% higher than 2008 (same period). The countries parts from Americas which, are bigger buyers include China 336 TMT; Thailand 261 TMT; Vietnam 200 TMT; Malaysia 30 TMT. Countries like Turkey and Egypt have been consistently importing the product for use in all livestock rations. The current price FOB Gulf is indicated at $171 for Jan/Feb and $163 for Mar. Current CNF values for SEA region are close to $235-246 depending on the destination. The other protein meal (corn gluten) is trading at $670 per MT (FOB US Gulf).
Whole sale markets receive grain, prices move lower, inflation is up
Maize prices have moved up in the market yard by 3.7% to Rs.9300 ($200) per MT range. Prices are higher than last year by 15%. Prices in Andhra Pradesh moved up by 0.73% to Rs.8600 ($185) per MT while in Gujarat, Tamil Nadu and Uttar Pradesh the prices moved lower by 1.13%, 0.63% and 8.3% to Rs.9950 ($204), Rs,8600 ($185) and Rs.9700 ($209) per MT respectively. Prices remained stable in Karnataka and Maharashtra.
On the NCDEX futures market, prices moved lower. Dec ended 0.8% lower than last week at Rs.9830 ($211) per MT; Jan down 1.17% Rs.10100 ($217) ; Feb down 1.66% to Rs.10350 ($223) ; Mar down 3% to Rs.10570 ($227). Spot markets to ended lower than last week with Karimnagar losing the most 2.48% to Rs.9360 ($201). Nizamabad was down 0.68% to Rs.9583 ($206) and Davangere lost 0.2% to Rs.9350 (201) per MT. On the MCX futures, Dec contract was stable at Rs.9870 ($212) per MT, while in the Spot Nizamabad, price was Rs.9555 ($205) per MT, down 0.93% and much closer to NCDEX Nizamabad spot price.
It is interesting to note that the Dec futures have been inching up for the last 3 weeks now and just about 2.5% higher than the spot prices at Nizamabad.
Pearl Millet (Bajra) prices were down by 4.4% to Rs.9900 ($213) per MT, but are higher than last year by 25.5%. Against maize, the prices are higher by 5.9% at the market yard.
Sorghum (Jowar) prices moved up by 15% at the market yard to reach Rs.12770 ($275) per MT, about 32% higher than last year and 27.6% higher than maize.
Barley prices also moved up by 8% at the market yard to Rs.9050 ($195) per MT. Prices are higher than last year by 5.8%. In the futures market, Dec contract was down by 3.28% to Rs.9608 ($207). Apr and May contract also lost 3.28% and 0.45% to close at Rs.10300 ($221) and Rs.10462 ($225) per MT. Jaipur spot price for barley was Rs.9450 ($203) per Mt, down 0.2% from last week.
On CBOT corn prices moved up by about +4% as the harvest is delayed further due to blizzard conditions in the corn belt at least 38 MMT (1.5 billion bushels) is still in the field. Dec contract up 4.18% to $153.22 per MT; Mar up 4.12% to $159.20 per MT and May up 4.11% to $163.53 per MT. FOB Gulf price is indicated at $179-182 per Mt for Jan to Mar, while FOB PNW value is indicated at $194-196 per MT. Sorghum is indicated higher than corn at $186/189 per Mt FOB Gulf.
DDGS prices FOB US Gulf for Dec were indicated close to $182 per MT, while for Jan and Feb were indicated at $177 per MT and $166 per MT respectively. Prices CNF SEA region (Vietman) were indicated at $240 per MT.
The freight rates are little lower as the markets get ready for a holiday season. Gulf – Japan was indicated at $68 (down $1) per MT and PNW japan was indicated at $39 (down $2) per MT.
Food prices in India are moving up every week and the food inflation for the week Nov 28 touched 19.05%, 1.55% higher than the previous week (Nov 21). Analysts believe that while the food inflation is based on WPI, at the consumer level (retail) the prices are much higher and that the food inflation will be more than 25%.
There are many areas in Punjab dairy belt where maize has been grown for last two years. This though is not for grain production, but for corn silage for feeding to dairy animals. Using the seed for grain production (early maturity) makes a lower grade silage with high dry matter and lower protein. As the feed prices move up, farmers have started to look for alternatives, which is taxing to the animals and reduces production. Farmers at different locations, have put the feed cost per kg of milk at Rs.9.6 - 11.6 and the cost of production at Rs.11 – 13.5 per liter depending on production of milk.
Amit Sachdev, India Representative, U S Grains Council, Email: usgcindia@gmail.com
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
