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NEW DELHI (Commoditiescontrol) – Improved and well distributed rainfall has intensified maize sowing in the ongoing kharif season as farmers are also seen prompted by firm trend in prices this year due to shortage of supply compared to demand.
The government allowed importing 5 lakh tonnes of maize under tariff rate quota by the state trading Enterprise to meet the demand of poultry feed and other industrial sector in the country after which several tenders were floated by the state-owned trading agencies. Market analysts as well as traders believe recent fall in maize prices in the domestic market is a sappy effect of high acreage and anticipation of increased supply of imported maize.
The government international trading companies PEC Ltd State Trading Corporation of India Ltd (STC) invited bids from foreign suppliers or sellers last month for imports of 2,00,000 MT and 1,30,000 MT of maize respectively.
According to PEC official sources, four foreign suppliers including Netherland based trading company, Nidera have expressed their interest for the tenders for imports of maize floated by the company.
They have furnished the price quotes between $216-227 a tonne CIF(cost including freight) and shipment is scheduled in January.
At current exchange rate, it will cost at Rs. 14,437.43- 15,172.67/tonne or Rs. 1,444-1,517/100kg at port while maize prices are currently, ruling around Rs.1,425-1,525/100kg at Gulab Bagh market in Purnia, a major trading centre in Bihar where cropping is done at large scale during rabi season. However, maize is grown in Bihar during all three seasons-Kharif, Rabi and Jayad(Summer season).
Feed sector’s demand is expected to increase in near term while supply of maize is currently low in the country, hence, prices are likely to rule firm until new crop arrives, said most marketmen. Arrivals of fresh crop are likely to begin in September in some areas of the country. Normally, maize crop planted during May-August is harvest in September-December.
According to Pappu Yadav, Proprietor, Yadav Brothers, a maize trading company of Gulab Bagh, Maize prices will trade more or less steady this month and further direction in prices will depend on the contracts signed by the foreign suppliers and their price quotes, hence, there is least chance of much bearish at present.
As per the latest United States Department of Agriculture (USDA ) report on Indian Food grains, higher acreage of in the major producing states like Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Telangana and Andhra Pradesh, Uttar Pradesh and Bihar will boost production of maize to 230 lakh tonnes this crop year.
However, excess rains during September and October may affect the yield prospects as the crop would be at the harvest stage at the same time, sufficient rainfall will be critical for sowing prospects for the rabi season.
According to the fourth advance estimates for major crop production released by the Department of Agriculture, Cooperation and Farmers Welfare on Tuesday, maize output in the rabi season 2015-16 has been estimated at 65.6 lakh tonnes against 71.6 lakh tonnes last year.
Maize is used as an industrial input by starch and cattle feed processors who are waiting for imported corn as the government trading companies have invited bids from foreign suppliers, that is the reason why demand is low, said a market observer.
According to him, higher acreage of maize in the current season has escalated pressure on prices as downward movement at future trade is continuously observed.
Due to weak demand from consumption centres, prices of maize are stable, however, prices are already up and there is no question of any bearish market trend in near term, said Santosh Gupta, a Gulab Bagh based trader who exclusively deals in maize.
Area under maize crop in the country as on August 4, 2016, was 79.45 lakh hectares against 70.37 lakh hectares. Hence, maize acreage in the country has significantly increased 12.9 percent from last year, surpassing the normal area coverage at 73.5 lakh hectares.
Area under maize crop in Uttar Pradesh outpaced the target set by Govt for ongoing kharif sowing season. As on July 31, 2016, maize sown area was 7.78 lakh hectares in the state against 7.75 lakh hectares fixed for maize crop the current season, however, present acreage is still down from last year as 7.81 lakh hectares farm land was under maize crop in the corresponding year ago period.
Area under maize crop in Bihar as on August 2, 2016, was 4.87 lakh hectares against 4.13 lakh hectares covered till August 5, 2015. The acreage of maize has also surpassed the target fixed by the government at 4.75 lakh hectares for maize crop in the current season.
(By Commoditiescontrol Bureau; +91-22-40015533)
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