Coarse grain prices down in India- could be a passing phase

Coarse grain prices down in India- could be a passing phase

Coarse grain prices moved lower as the deliveries to the market improved to some extent. Maize prices were reported to be down by about 1% to Rs.9230 ($202) per MT on an average at the market yard. The prices though are higher than last year by 17.8% at this time of the year (First week of Jan). Prices in Andhra and Tamil nadu were reported to be down by 1% and 2% to Rs.8500 ($186) and Rs. 8630 ($189) per MTrespectively. Prices in Gujarat, Rajasthan and Uttar Pradesh however moved up by 0.5%, 7.2% and 4.5% to Rs.10150 per MT, RS.10628 ($234) per MT and Rs.10193 ($224) per MT respectively. Prices in Karnataka and Maharashtra remained stable close to Rs.8400 ($184) and Rs.8500 ($186) per MT.

Endusers in West Bengal have purchased maize at prices close to Rs.11300 ($248) per MT, while in Gujarat last week the delivered values were close to Rs.10200 ($224) per MT. There are some press reports indicating that some export consignments have been rejected at the ports due to quality concerns by the buyer’s agents and this maize would eventually find way into the poultry / starch / dairy feed sector.

In the futures market, prices moved lower for all the contracts by about 0.1 – 1%. Jan down to Rs.9300 ($204) per Mt; Feb down 1% to Rs.9475 ($208) per MT; Mar down 0.3% to RS.9720 ($214) per MT and Apr down 0.1% to Rs.9940 ($218) per MT. In the spot markets as well prices were reported to be down. Nizamabad and Karimnagar stable at Rs.9160 ($201) and Rs.9155 ($201) per MT, while prices in Davangere slumped by 2.64% to Rs.8900 ($196) per MT. Pressure of rejection of the consignment at the ports could be one more reason to drag the pries lower as most of the stock was sourced from the corn belts of Davangere, Haveri and Ranibannur and this has also effected the future values. The lower prices could be a temporary phase and is always seen about 8 - 10 weeks after the start of the the harvest when more stocks arrive in the market. In 2008/09 the prices started to move lower in Sept (Rs.8500/$187); Oct (Rs.8223/$181); Nov (Rs.8137/$179); Dec (Rs.7815/$172), after which the prices have continued an upward trend. This year (2009/10) the lower movement of the prices was delayed due to the delayed harvest.

Sugar prices in the wholesale markets have continued their northward march, crossed Rs.44 ($0.96) per kg. In the retail market, branded sugar is already selling at Rs.48 ($1.05) per kg. With such high prices, the demand of sugar substitutes (Dextrose/Maltose) is likely to increase. Would the beverage companies demand High Fructose Corn Syrup (HFCS), would be a factor. Currently all the beverage companies use sugar, but with increase in prices, there just may be point to shift to HFCS.

Pearl Millet prices slumped by 2.4% to Rs.10157 ($223) per MT, but were higher than last year by 23.8%. Against maize, the prices of pearl millet are higher by 9.1%.

Sorghum prices also slumped by 4.5% to Rs.11740 ($258) per MT, but remained higher than last year by 24.5%. The prices were also higher than maize by 21.4%.

Barley prices have moved up by 6% this week to Rs.9040 ($199) per MT. Prices are higher than last year by about 7.6%. In the futures market, prices of barley have slumped, Apr down by 2.4% to Rs.10210 ($224) per MT; May down by 2.9% to Rs.10342 ($227) per MT. in the SPOT market (Jaipur), prices were down by 0.5% to Rs.9455 ($208) per MT. In the US, feed barley prices are close to $215 per MT.

On CBOT corn prices continued to climb and were up by 1.3% – 1.7% for the three contacts. Mar up 1.35% to $165.34 per MT; May up 1.37% to $169.28% and Jul up 1.75% to $173.45 per MT. Due to pressure on rail car availability, freezing of rivers, which has affected the barge movement, the FOB values have also riser sharply. FOB US Gulf was indicated at $196 for Feb, while for Mar was indicated at $192 per MT. FOB PNW was indicated at $215-217 per MT for Jan – April. Sorghum prices (FOB us Gulf) were indicated higher than corn at $200/202 per MT.

DDGS prices are under pressure due to weather concerns, non availability of containers and rail cars as well. FOB US Gulf were indicated at $174 for Feb 2010, while for Mar 2010, are indicated at $166 per MT. CNF values (Thailand) were indicated at $248 per MT. The other protein meal (Corn Gluten meal) is indicated at $655 per MT (FOB US Gulf).

The freight rates have moved up due to increased demand of freight ships for coal and other raw materials as the world economy get back to shape in the new year. Gulf – Japan rates were indicated at $72 per MT, up $4 per MT and PNW-Japan was also up by $5 per MT to $42 per MT against last week. The increased in crude prices is also one more reason for the freight rates to strengthen.

Amit Sachdev, India Representative, U S Grains Council. E mail: usgcindia@gmail.com