Mixed bag for prices in India, prices slump in US due to higher stocks

Mixed bag for prices in India, prices slump in US due to higher stocks

Maize prices in India slipped close to MSP levels at the market yard, down 4.7% to Rs.8600 per MT. Prices are close to last year’s level at this time of the year. Reasons attributed are slow exports, increased availability and Rabi arrivals., that have put pressure on the corn crop. Arrivals in Bihar have started and prices are close to Rs.9300 – 9500 per MT and are expected to go down in the next 15-20 days and the arrivals increase.  Prices in other states have also gone down including Andhra Pradesh, do2n 2.1% to Rs.8375 per MT; Karnataka down 0.7% to Rs.8407 per MT; Tamil Nadu down 0.17% to Rs.8570 per MT and Uttar Pradesh down 1.35% to Rs.9750 per MT. Prices have remained stable in Gujarat at about Rs.9500 per MT, Maharashtra at Rs.8500 per MT, but reported to be up in Rajasthan by 4.8% to Rs.10050 per MT. There is a good quantum of white maize also available in the market, priced at Rs.10,000 per MT.

In the futures market the price of maize for the two close contracts was lower that last week’s close. April down 0.17% to Rs.880p per MT and May down 0.27% to Rs.8975 per MT. June contract was up by 0.43% to Rs.9230 per MT, while July contact remained stable at Rs.9350 per MT. In the spot markets, the prices were down only in Karimnagar by 0.13% to Rs.8700 per MT, but were reported to be up in Nizamabad by0.6% to Rs.8461 per MT and Davangere by 0.20 to 9038 per MT.

Pearl Millet (Bajra) prices were down 6.1% to Rs.9235 per MT, but remained higher than last year by 4.3%. Prices were also higher than last year. Prices in Gujarat have touched Rs.10,730 per Mt, while in Rajatshan and Uttar Pradesh are Rs.9760 per Mt and Rs.8610 per MT respectively.

Sorghum (Jowar) prices have also moved up by 3.6% to Rs.11234 per MT and are higher than last year by 21.4%. Prices are also higher than maize by 23.4%. Prices in Maharashtra are close to Rs.12,500 per MT, while in Rajasthan are Rs.11180 per MT and Karnataka Rs.9860 per MT. While Jowar/Sorghum for food is available at Rs.16000 per MT at the market yard.

Barley prices have also increased by 4.4% to Rs.8593 per MT and prices are reported to be 5% higher than last year. On the futures market as well the spot market, prices moved up. Apr up 2.7% to Rs.9538 per MT; May up 1.80% to Rs9620 per MT; Jun up 6.77% to Rs.9836 per MT; July up 3.7% to Rs.10030 per MT. Aug and Sept contracts were indicated at Rs.10170 and Rs.10164 per MT respectively. Prices in US for feed barley (FOB US gulf) were indicated at $210 for April and $200 per MT for Jun.

US markets this week were down, showing that there is enough corn in the market. May delivery down 4.75% to $140.38 per MT’ Jul down 4.51% tp $144.87 per MT and Sept down 4.41% to $148.25 per MT. FOB gulf prices were down correspondingly and indicated at %160-166 per MT for April – July period. FOB PNW for the same period was indicated at $183-187 per MT.

DDGS prices on FOB basis have move up slightly as there are reports that some plants have closed for maintenance, but the demand remains higher domestically and farmers are trying to increase the use of DDGS in all rations in the US. Export demand is also strong. Prices were indicated at $ 149 for Apr; $144 for May and $142 for Jun delivery. On CNF basis SEA region, prices to Vierman were $252 – 256 per MT and for China $240-244 per MT for May – June period. 

The freight markets were down this week and as per reports, Gulf-Japan benchmark was indicated at $69 per MT while PNW-Japan benchmark was indicated at $41 per MT.

As per the latest USDA report (Mar 10,2 010), world corn production for 2009/10 is raised 5.9 million tons to 803.69 MMT and ending stocks up to 140.15 MMT. The major reasons for increase are higher corn production in Argentina and South Africa, where the production is estimated at 21 MMT and 13.5 MMT respectively by USDA.

Harvested area and yield are raised for both countries as abundant soil moisture and lack of stressful heat during the past month supported crops through critical stages of development.

Table : World and selected countries corn production in 2010

Country	Production	Usage	Exports	Ending stocks
World	803.69 MMT			140.15 MMT
USA	333.53 MMT	282.33 MMT	48.26 MMT	45.70 MMT
China	155.00 MMT	159 MMT (Feed use 116 MMT)	0.5 MMT	48.77 MMT
Argentina	USDA 21.0 Govt 20.50	7.10 MMT	12.0 MMT (up from 9.5 MMT est, in Feb 2010)	2.54 MMT
Brazil	USDA 51.0 MMT	45.5 MMT	8.0 MMT (down from 9 MMT est in Feb 2010)	11.28 MMT
South Africa	USDA 13.50 MMT Govt. 12.961	10.40 MMT	2.5 MMT (up from 1.5 MMT estimated in 1.5 MMT)	4.31 MMT
Source: USDA Reports and other press reports

While Argentina may have produced a record corn crop, a strike called by the unions has halted loading of ships from Argentina. This year the workers are demanding a higher wage and last year it was the farmers, who are demanding removal of export tax.

Reports indicate that the corn yields are very good in Brazil, but the prices are much lower. The support price is set at BRL 13.98 per sack of 60 kg (equivalent to Rs.5941 per MT). Current prices are BRL 9 per sack of 60 kg (equivalent to Rs.3825 per MT). Several press reports indicate that farmers in Brazil may skip corn product next year and shift to Soya.

Amit Sachdev

India Representative

U S Grains Council

Email: usgcindia@gmail.com

Coarse grain prices move lower- good buy for end users

Coarse grain prices move lower- good buy for end users

Maize prices were reported lower than last week by 2.1% to Rs.9030 per MT. the prices were 7.9% higher than last year at this time of the year.  There were areas where prices wee higher than last week, Andhra Pradesh up 0.48%  at RS.8560 per MT; Karnataka 1.87% to Rs.8470 per MT; Tamil nadu 1.19% to Rs.8585 per MT and Uttar Pradesh 0.54% to Rs.9884 per MT. Prices in Gujarat and Rajasthan were reported to be lower than last week by 5.11% and 1.78% to Rs.9498 and Rs.9587 per MT respectively.

Food inflation for the week ending Mar 06, 2010 has also eased to 16.3% which is good news for the end users and consumers.

On NCDEX the prices were also down for the four contracts, April down 1.5% to Rs.8815 per MT; May down 0.77% to Rs.9000 per MT; Jun down 0.1% to 9190 per MT and Jul 1.52% to Rs.9350 per MT. In the spot market though prices in Karimnagar and Davangere were up by 0.84% and 1.13% to Rs.8712 per MT and Rs.9020 per MT respectively. Prices in Nizamabad were down by 1.13% to Rs.8438 per MT.

Prices in some areas of Karnataka have been reported lower than Minimum Support Price, GOI data also reveals 260,000 MT of maize stocks (in Karnataka), about 77000 MT of Sorghum and about 580 MT of Bajra which will be put on e-auction on the same lines as wheat.

Pearl Millet (Bajra) prices were down by 2.6% to Rs.9835 per MT and 13.6% higher than last year. Prices were higher than maize by 8.2%. Bajra prices in Rajasthan averaged Rs.9400 per MT, Gujarat Rs.10660 per MT; Rs.8660 in Haryana and Rs.8400 per MT in Uttar Pradesh.

Sorghum (Jowar) prices were down by 11.1% this week to Rs.10840 per MT and higher than last year by 13.6%. Prices are higher than maize by 16.7%. Average prices in Andhra Pradesh were reported at Rs.10500 per MT, Karnataka Rs.9800 per MT., Rajasthan Rs.9000 per MT and Rs.9380 in Uttar Pradesh. 

Barley prices were down by 8.4% to Rs.8230 per MT, but remained 6.6% higher than last year. In the futures market (NCDEX), prices for the two contracts April and May were up by 2.54% and 1.76% to Rs.9280 and Rs.9450 per MT respectively. Prices for all other contracts were stable. In the Jaipur spot market the prices were down by 0.21% to Rs.8981 per MT.

On CBOT, prices for the two contacts May and July were reported higher by 2.80 and 2.66% to $147.39 and $151.72%. For Sept contract as well prices were reported at $155.10 per MT. The FOB prices in Gulf were indicated at $167 - 172 per MT for Apr - Jun and for PNW for indicated at $191-195 per MT for Apr - Jun, reflecting on the higher CBOT values. Sorghum prices on FOB basis (US Gulf) were indicated at $177-179 per MT, about 4-6% higher than corn. 

DDGS prices on FOB basis were higher than last week slightly at $143 for Mar, $140 for Apr and $138 for May. CNF prices to the SEA region to Vietnam were indicated at $235 per MT for April and $240 for May. Prices to China were indicated at $240 for Apr and $244 for may delivery. Report are that some of the ethanol plants are on maintenance and hence the prices may be better.

Freight rates are reported to be higher again this week, due to Chinese buying also also due to the South American grain harvest. Gulf-Japan benchmark was indicated at $71 (+$1) while PNW-Japan benchmark was indicated at $43 per MT. (no change). Argentina/Brazil to China was indicated at $70 - 74 per MT.

Amit Sachdev

India Representative

U S Grains Council

E mail: usgcindia@gmail.com

Market is undecided, spot prices remain good for end users

Market is undecided, spot prices remain good for end users

Maize prices were up slightly by 0.7% this week to Rs.9223 per MT. The prices were higher than last year by 12.7%. Prices at some of the major production centers was down this week slightly. Andhra Pradesh down by 0.16% to Rs.8520 per MT; Karnataka down by 1.70% to Rs.8315 per MT; Rajasthan down by 0.22% to Rs.9761 per MT and Tamil Nadu down by 1.63% to Rs.8484 per Mt. Reports also indicate that maize stocks have been purchased by Karnataka Govt as well as the prices went below MSP in some areas. At some other locations, prices were also up like in Gujarat 0.49% to Rs.10010 per MT; Maharahstra up by 0.15% to Rs.8490 per MT and Uttar Pradesh by 1.60% to Rs.9830 per MT. Reason for prices coming down in some areas is attributed to a good arrivals as the stocks are coming in anticipating a good Rabi crop in these regions.

In the futures market prices were also reported to be up. March delivery up 1.62% to Rs.8770 per MT, April delivery up 2.05% to Rs.8950 per MT; May up 1.34% to Rs.9070 per MT and Jun delivery stable at Rs.9200 per MT. July delivery as indicated at Rs.9495 per MT on NCDEX. In the spot market however the prices were reported to be down. Nizamabad and Karimnagar, bith in Andhra Pradesh, down by 0.7 and 1.47% to Rs.8535 and Rs.8639 per MT respectively. Prices in Davangere were indicated 0.65% higher than last week to Rs.8919 per MT.

Pearl Millet (Bajra) prices dipped by 1.4% to Rs.10010 per MT, but were reported higher than last year by 15.3%. Prices were higher than maize by 8.7%.

Sorghum (Jowar) prices were reported higher than last week by 10.4% to Rs.12189 per MT, about 29.8% higher than last year and 24.3% higher than maize. The average price for Sorghum in Maharashtra was reported at 10064 per MT wherein the food grade sorghum was available in the range of Rs.15000 – 17000 per MT. Price of Sorghum in Andhra Pradesh was reported at Rs.10000 per MT, wherein good quality sorghum was trading at Rs.12000- 14000 per MT. In Karnataka the average price was Rs.9167 per MT.

Barley prices were up by 5.7% at the market yard to Rs.8990 per MT. Prices were higher than last year by 2.3%, In the futures market, while prices in April showed a slight decline of 0.11% to Rs.9050 per MT., Prices in May were indicated 1.11% higher at Rs.9286 per MT. June prices were indicated 5.09% lower than last week at Rs.9212 per MT. Indicative prices for July and August were Rs.9672 and Rs.9798 per MT respectively. In the spot market (Jaipur) prices were down by 0.22% to Rs.9000 per MT.

Corn prices slipped on CBOT for the three contracts. Mar down 2.9% to $139.36 per MT; May down by 2.98% to $143.37 per MT; Jul down by 2.84% to $143.78 per MT. The decrease was reflected in FOB prices as well, which were indicated at $163-167 for US Gulf for April/June and $187-191 per MT for PNW for Mar-June period. Sorghum price also indicated to be lower on FOB basis to $1172/174 per MT (US Gulf) for Mar-Jun period.

DDGS prices in the domestic market were reported much lower than last week at $142 per Mar and $138 for both April and May as the capacities are increasing. Anticipated production of DDGS could be 28-30 MMT in 2010, which is likely to put pressure on local prices. Prices on CNF basis to SEA region have however remain unchanged. Price of China was reported at $235 per MT while to Vietnam was $243 per MT.

The freight markets are substantially up across the board, with Gulf-Japan benchmark at $70 per MT. PNW-Japan was stable at $43 per MT. Freight rates for Argentina/Brazil to China are up again this week to $70-74 per MT.

Amit Sachdev

India Consultant

U S Grains Council

E Mail: usgcindia@gmail.com

Prices gel well for the end users on increased availability; What's in the budget for the processing sector

Prices gel well for the end users on increased availability

Maize prices moved up slightly (1.8%) on Pan India basis to Rs.9158 per MT. Prices remained higher than last year by 9.4%. There are many areas where prices moved lower than last week, including Andhra Pradesh down 0.36% to Rs.8530 per MT; Gujarat down 1.13% to Rs.9960 per MT, Tamil Nadu down 0.5% to Rs.8635 per MT. Prices in some locations were up, including Karnataka 0.69% to Rs.8490 per MT, Maharashtra up by 4% to Rs.8480 per MT, Rajasthan up by 1% to Rs.9780 per MT and Uttar Pradesh up by 1.6% to Rs.9675 per MT. Reports from Bihar indicate some contracts at Rs.9400 per MT for April/May delivery.

In the futures market the prices have slumped and are ranging between Rs.8600 - 9200 per MT. Mar down 0.46% to Rs.8630 per MT, Apr down 1.24% to Rs.8770 per MT; May down 0.3% to Rs.8950 per MT and Jun down 0.6% to Rs.9195 per MT. In the spot markets though the prices have moved up. Nizamabad up 0.3% to Rs.8595 per MT; Karimnagar up 0.37% to Rs.8770 per MT and Davangere up 0.70% to Rs.8861 per MT.

Prices of Pearl Millet (Bajra), moved up by 6.8% on pan india basis. Average prices were higher than last year by 17.4%. Prices were higher than maize by 10.6%. Prices in Uttar Pradesh were Rs.8715 per MT, while in Gujarat were Rs.10660. There are areas within the state where Pearl Millet is available at Rs.8250 - 8400 per MT, but quantities are limited. While it does make sense to use some Bajra (Pearl Millet) in poultry feed in North India, it will not be cost effective in Southern region as the freight component will make it's price much higher than maize in that region.

Prices of Sorghum (Jowar) were lower than last week by 0.6% to Rs.11040 per MT, prices however were higher than last year by 23.4%. Against maize, the average prices of sorghum was higher by 17.1%. Prices were much lower in Karnataka at Rs.8945 per MT and highest in Madhya pradesh at Rs.12810 per MT. White Sorghum, mostly used as food was at Rs.16000 per MT. Average prices in Maharashtra were Rs.9230 per MT. Low quality sorghum was available at Rs.7500 - 8500 per MT range in limited quantities.

Barley prices moved lower by about 8% to Rs.8500 per MT, Prices were also reported at 2.3% lower than last year. In the futures market too prices were lower for two contracts. April down by 2.2% to Rs.9060 per MT; May down by 1.24% to Rs.9184 per MT. Prices for June were unchanged at Rs.9698 per MT. In the spot market (Jaipur) prices were down by 2% to Rs.9020 per MT.

On CBOT, corn prices were down. The three most recent contracts Mar down 3.8% to $143.53 per MT, May down 3.74% to $147.78 per MT and July down 3.15% to $152.11 per MT. FOB values for gulf and PNW were indicated in the range of $169-172 per MT and $197-198 per MT respectively. Sorghum price on FOB GULF basis was indicated at $177/178 per MT.

DDGS prices in the domestic market (USA) are down as the corn prices are down and on FOB basis (US Gulf) were indicated at $149 per MT for Mar; $144 per MT for Apr; and $143 per MT for May delivery. It is the container freight component that add to the cost of the product. CNF prices to SEA region (Vietnam) were indicated at $243 per MT. 

There is a sudden upswing in the freight markets, US Gulf-Japan benchmark rates were up by $3 to $68 per MT and PNW-Japan were also indicated at $43 per MT, up $5 per MT.

What's in the  budget for the processing sector

In the budget 2010/11, the Finance Minister has been kind enough to the food processing sector.

1. Project imports status is granted to the initial setting up or substantial expansion of, a cold storage, cold room (including farm pre-coolers) for preservation or storage or an industrial unit for processing of agricultural, apiary, horticultural, dairy, poultry, aquatic & marine produce and meat. These projects would attract concessional rate of basic customs duty of 5%. The duty was 30% and the reduction in duty will help the industry invest in new poultry/dairy processing ventures.

2. Truck Refrigeration units for the manufacture of refrigerated vans/trucks are being exempted from basic customs duty. Such units are already exempt from excise duty. Investment in supply chain management for perishable products, specially food (meat, milk, fruits and vegetables). In line with point 1, new projects for processing.  

The duty reduction will help the sector increase investment in the sector.

Amit Sachdev

India Representative

U S Grains Council

E mail: usgcindia@gmail.com