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
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