Maize Prices Expects To Recover Soon - July 7, 2008

New Delhi: Maize prices are expected to recover soon and are likely to cross Rs 1,000 a quintal level within a month on supply concern, traders said. Maize prices are falling at both spot and futures markets due to the ban on the commodity's exports. According to the source, the impact on prices due to ban is a temporary and prices would go up again due to the supply crunch of the commodity till September, they said.

The Centre had announced ban on export of maize till October 15 to step up the domestic supply and in turn contain inflation which has risen to a double-digit level. As July-September being a lean period, the limited stock supplies would put pressure on prices till the ban period. With the sudden ban on exports, maize prices are sliding since yesterday. Spot prices fell to Rs 957 a quintal from Rs 964 a quintal. While on NCDEX, most-active July delivery of maize dropped by almost 8 per cent to Rs 894 a quintal.

Maize Prices Last Week Held Ground At Rs 7,200 A Tonne

Coimbatore: Market yard maize prices last week held ground at Rs 7,200 a tonne, though it is marginally lower compared to the previous week prices.

The delivered maize prices in Gujarat is quoted at Rs 8,400, while the same in Hyderabad is between Rs 7,900 and Rs 8,000 a tonne, according to the weekly commodity price quotes issued by the US Grains Council India market reports.

The maize export from India remained strong. The f.o.b. value of exports via Kandla is quoted at $205 per tonne and the delivered maize price to South-East Asian destination from India is quoted at $260 a tonne.

The report said that with import of India’s maize into Pakistan having opened, maize movement is on from Andhra, Karnataka and to some extend from Bihar.

Bajra, sorghum

The reports said that while bajra prices last week paled by five per cent to Rs 7,330 a tonne on improved arrivals in Rajasthan, UP and Gujarat, sorghum prices stood up by 12 per cent over the previous week at Rs 11,390 a tonne.

Barley

The barley prices remained stable at Rs 10,190 a tonne.

The corn price at the Chicago board of trade is quoted at $232 a tonne for the July shipment and the shipment for September is put at $237.

Maize Prices Turn Sober Amidst Export Ban Fears

Coimbatore: Maize prices have turned sober this week amidst speculation on the Union Government extending the export ban on the commodity too.

The market yard (loose) price of maize that remained firm over the past several weeks tumbled last week from the previous week’s Rs 7,200 a tonne to Rs 7,090.

According to the US Grains Council’s India market report, the sobering maize price is partly due to increased arrivals of the rabi crop into major markets.

Millet, jowar lower

The fear of the Government extending the export ban to coarser grains is also believed to be behind the sobering prices this week which have seen the price of pearl millet (bajra) ruling lower by some nine per cent over previous week’s price at Rs 7,000 a tonne and the jowar (sorghum) at Rs 10,050 a tonne, some 1.2 per cent lower than the previous week’s price level. Barley prices too slipped to Rs 950 a tonne, some one per cent down from the previous week’s levels.

Maize futures on the Chicago Board of Trade closed lower at $229.98 a tonne for May 2008 delivery and the July delivery too quoted marginally lower at $235.18 a tonne.

Maize Prices Up Amidst Reports Of Crop Damage

Coimbatore: Maize prices continued to move northward amidst reports of crop damages in some parts of the country due to rains.

The spot price remained higher even as the market yard rates for the crop continued to rule higher for the week ended April 4.The futures prices too are firming up for the July delivery.

According to the US Grains Council’s India reports, price data, maize price at market yard (loose), was quoted at Rs 7,200 a tonne, marginally higher over the previous week’s price.

While price at Davangere market was at Rs 7,160 a tonne, the same was higher at Nizamabad at Rs 7,530 and Rs 8,375 at Nimbaheda, Rs 8,300 at Ratlam, whereas the price quote for Karimnagar market was Rs 7,390. The futures prices for April and July deliveries are put at Rs 7,700 and Rs 8,510 a tonne respectively.

The reports quoting market sources said that rains in parts of peninsula India have caused damages to crops, especially in some areas in Andhra and Tamil Nadu. They have also expressed apprehension on quality deterioration which may leave the commodity not suitable for use either by the starch industry or poultry feed sector.

Chicago Board of Trade rates rally: The US corn prices on the Chicago board of trade kept its rally with the quote for the July delivery crossing $6 a bushel (236 dollar a tonne). While the rate for May delivery closed at $235.42 a tonne, the same for the July delivery touched $240.62, the Council’s India reports added.

Maize Prices May Remain Volatile In Short Term

Coimbatore: Maize prices are expected to remain high in medium and long term, though they may be volatile in the short term, thanks to all round higher consumption demand, according to two delegates from the US associated with the US Grains Council who recently travelled to India meeting the members connected with the starch, poultry and feed sectors.

The US members, Dr Simla Tokgoz, a research associate at Food Agriculture Policy Research Institute (FAPRI) at Iowa state university, and Ken Wardsworth, a farmer member of the Council from Michigan state, pointed out the increased commodity price was not on account of biofuels only.

The growing economy in countries such as India, China and Brazil was behind the increased commodities prices, they noted.

A higher demand of meat, milk and eggs by high-income middle class in the country is a factor in this increased demand of corn in India, a US Grains Council’s report quoted the two as saying in their recent interaction with the industry delegates consuming maize.

The US members visited Ahmedabad, Mumbai and Coimbatore to meet the members of the poultry, feed and starch industries. According to Dr Simla, China would in near future not sell its maize as its domestic demand was rapidly growing.

In the case of India, despite increased domestic maize production, its rising demand due to increased needs from poultry, starch and dairy sectors, will turn it a net importer by 2015. The demand in Brazil too was high where livestock production was on the rise due to increased investments and export opportunities of value added products.

The US crop would be enough to supply to the world needs though there would be increased usage of maize for bio-fuel production following the mandate by that country to produce 15 billion gallons (56.7 billion litres) by 2020.

The end-users of maize will need to change the way they do business and hedge in the futures market to manage risks. They will need to add different value to their products in their portfolio to increase profitability, the Council’s report quoted them as saying in their ‘maize presentation’ to the Indian end-users.

Maize Prices Move Up

Coimbatore: Maize prices have firmed up over the week.

While the market yard price has risen by about five per cent at Rs 7,550 per tonne over the previous week, there has been a surge in the spot rates as well.

Maize spot price at Davangere was quoted at Rs 7,020 per tonne, while the same at Nizamabad and Karimnagar was quoted at Rs 7,550 and Rs 7,442 respectively which are marginally higher compared to the previous week price quotes.

Forward quotes

According to the US Grains Council India market reports, the maize rates for May and June deliveries have moved up to Rs 8,955-9,350 per tonne respectively from the previous week’s Rs 8,900-9,150.

The reports said with the Pakistan removing import duty on maize, there has been enquiries for import of India’s maize and the reported price offer of $250 (CNF Pakistan) is quoted for the end users in Pakistan for the supplies via Wagah border post.

Maize Futures Close Higher

Coimbatore: Maize futures has closed higher in the Rs 8,140-8,490 per tonne range for the March/April deliveries as compared to current market yard prices (loose) which are quoted at Rs 7,200-7,300 per tonne, according to market reports. Run-up to Budget 2008-09

The May and June 2008 deliveries are quoted even higher at Rs 8,800-8,990 per tonne respectively.

According to the US Grains Council India market report for the just ended week, with the demand for Indian maize in export market remaining firm, the prices have started to show a firm trend after a little lull. Another reason for higher futures prices is the anticipated lower rabi crop which is expected to be around 2.54 million tonnes as against last year’s crop of 3.54 mt.

The report also stated that maize price in spot market too rose this week with Ratlam and Nimbaheda market quoting at Rs 8,300 and Rs 8,375 per tonne respectively, while the prices in Karimnagar and Davangere markets were prevailing at Rs 7,217 and Rs 6,877 per tonne.

The US maize prices kept moving up along with higher freight giving support to export of maize from India to South-East Asian markets. For example, the US Gulf maize prices on f.o.b. were indicated at $228-229 per tonne and the freight cost to Japan was at $107 per tonne, making the aggregate delivery cost at $325-326 per tonne. Whereas Indian corn at a quote of $235 per tonne (f.o.b. and freight quoted at $38-40 per tonne for the South Asian destinations, the delivery cost would work out at $275-280 per tonne. With the cost differential of $40 per tonne between Indian and the US corn, another round of buying by exporters could not be ruled out, the report added.

Maize Price Remains Volatile Despite Bird Flu

Coimbatore: Maize price remained volatile last week with the rates for the commodities quoted at mandis touching Rs 7,200-7,220 per tonne, some three per cent higher than last week, market reports said. The volatility is due to bird flu in the eastern region and high exports.

The maize supplies to the eastern region were affected this week. There has been a supply crunch in other parts especially Gujarat where the maize deliveries were being made at Rs 8,800 per tonne or higher, according to the US Grains Council’s India reports.

The prices at upmarket centres including Nibaheda (Rajasthan) and Ratlam in Madhya Pradesh remained firm at the previous week’s level, the rates moved up slightly in southern centres including Nizamabad, Kareem nagar and Davangee with the increasing ranging from Rs 90-200 per tonne.

The report said of the total maize production of 16 million tonnes expected for 2007-08, poultry sector is expected to use close to 48 per cent and starch sector another 11.4 per cent.

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In the wake of the bird flu attacks in West Bengal, the wholesale prices of broilers and eggs went down by 20-25 per cent across all markets in the country.

Chilli Futures Tumble On Weak Demand

Mumbai: Chilli futures in NCDEX tumbled 3.53 per cent on weak demand in the physical market coupled with offloading of old stocks.

Kapas fell 1.42 per cent to Rs 494 per 20 kg on profit taking on recent rally. Guar seed futures dropped 1.36 per cent to Rs 1,737 per quintal on profit booking as spot markets remained steady.

Maize down

Maize prices came down by 1.27 per cent to Rs 780 per quintal due to profit booking after the recent rally. Pepper futures dropped 1.61 per quintal on account of long liquidation coupled with selling pressure in absence of major trigger from international market.

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On MCX, potato prices fell sharply 1.68 per cent to Rs 557 per quintal with cloudy weather getting clearer in northern states. Mentha oil futures traded down 1.36 per cent to Rs 429 per 20 kg on the back of sluggish demand. Kapas prices fell 1.26 per cent to Rs 394 per 20 kg on profit taking.

Turnover

MCX recorded a turnover of Rs 5,802 crore up to 5 pm, while it was Rs 2,645 crore on Thursday.