M. R. SUBRAMANI, THE HINDU BUSINESS LINE
Low stocks impact shipments; domestic prices scale record highs
CHENNAI, AUG. 27:
Maize (corn) prices have surged to record highs in the domestic market but they are still one of the cheapest options in the global market.
However, shortage of stocks is hindering maize exports.
“There may not be much of maize and domestic market is priced higher. But by world standards, it is still cheaper. Indian maize has been accepted in the world market and will continue to be traded in the close by markets of South-East and West Asia,” said Amit Sachdev of Techpro (India) Private Limited, in his weekly report on Indian grains.
On Monday, maize was quoted at Rs 1,537 a quintal in the spot market at Nizamabad, Andhra Pradesh.
In the futures market, maize (industrial grade) for delivery in September dropped by Rs 6 to Rs 1,548.
But other contracts were up marginally, with October rising to Rs 1,532, November to Rs 1,452 and December to Rs 1,497.
SHORTAGE
“We are unable to get stocks since they are short,” said T.P.S. Madan, an exporter in Madurai. This has led to a situation wherein Indian exporters are unable to sign deals with buyers abroad. “Some small traders have sold to exporters in Chennai,” said Sachdev. “Though export may not happen now, small cargoes have gone to South-East Asia,” he said.
Indian maize is currently quoted about $305 a tonne f.o.b. In contrast, US corn is quoted at around $335 for August-November delivery.
SURGING PRICES
Maize prices have surged over 10 per cent since the first week of this month on deficient monsoon and a bullish global market.
In the global market, corn prices have increased 26 per cent to near-record $8.49 a bushel. On Monday, it was quoted at $8.16.
The US corn crop is now estimated at 10.447 billion bushels, down some 0.300 billion from projections made last month.
US corn and soyabean crop have been affected by the worst drought that country is facing in five decades.
“Corn crop has been damaged in North and South America. Even at $310 CNF, Malaysians are interested to buy Indian maize,” said A. Rajkumar of Alagendran Group that exports maize.
“As of now, Indian maize is cheaper but we are not getting the required quantity in the domestic market. Maybe, traders or farmers are holding back,” said Madan Prakash, Director of Rajathi Group of Companies that exports agricultural produce.
SOWING
“There is demand from Malaysia, Indonesia, Vietnam and the Gulf. But no exporter is offering bulk volume,” said Alagendran. “Kharif sowing is lower compared with last year. This has also made exporters being conservative in their offering,” he said.
While the crop situation is seen as bad in Karnataka, it is reported to be good in Andhra Pradesh.
According to the Agriculture Ministry, kharif maize sowing is lower by one per cent at 71.3 lakh hectare compared with the same period a year ago.
The data show that area is higher in Andhra Pradesh, Bihar, Madhya Pradesh, Jharkhand and Maharashtra, while in Karnataka it is 15 per cent lower.
PRICE OUTLOOK
With traders being bullish, corn prices could witness some correction after the second week of September. “Some correction has to happen,” said Alagendran.
Prices could then gain as kharif arrivals are likely to be late and with rain now lashing most parts of the country, the moisture content in the crop could be high.
“The new crop will be delayed slightly and could arrive in November,” said Madan.
Low stocks impact shipments; domestic prices scale record highs
CHENNAI, AUG. 27:
Maize (corn) prices have surged to record highs in the domestic market but they are still one of the cheapest options in the global market.
However, shortage of stocks is hindering maize exports.
“There may not be much of maize and domestic market is priced higher. But by world standards, it is still cheaper. Indian maize has been accepted in the world market and will continue to be traded in the close by markets of South-East and West Asia,” said Amit Sachdev of Techpro (India) Private Limited, in his weekly report on Indian grains.
On Monday, maize was quoted at Rs 1,537 a quintal in the spot market at Nizamabad, Andhra Pradesh.
In the futures market, maize (industrial grade) for delivery in September dropped by Rs 6 to Rs 1,548.
But other contracts were up marginally, with October rising to Rs 1,532, November to Rs 1,452 and December to Rs 1,497.
SHORTAGE
“We are unable to get stocks since they are short,” said T.P.S. Madan, an exporter in Madurai. This has led to a situation wherein Indian exporters are unable to sign deals with buyers abroad. “Some small traders have sold to exporters in Chennai,” said Sachdev. “Though export may not happen now, small cargoes have gone to South-East Asia,” he said.
Indian maize is currently quoted about $305 a tonne f.o.b. In contrast, US corn is quoted at around $335 for August-November delivery.
SURGING PRICES
Maize prices have surged over 10 per cent since the first week of this month on deficient monsoon and a bullish global market.
In the global market, corn prices have increased 26 per cent to near-record $8.49 a bushel. On Monday, it was quoted at $8.16.
The US corn crop is now estimated at 10.447 billion bushels, down some 0.300 billion from projections made last month.
US corn and soyabean crop have been affected by the worst drought that country is facing in five decades.
“Corn crop has been damaged in North and South America. Even at $310 CNF, Malaysians are interested to buy Indian maize,” said A. Rajkumar of Alagendran Group that exports maize.
“As of now, Indian maize is cheaper but we are not getting the required quantity in the domestic market. Maybe, traders or farmers are holding back,” said Madan Prakash, Director of Rajathi Group of Companies that exports agricultural produce.
SOWING
“There is demand from Malaysia, Indonesia, Vietnam and the Gulf. But no exporter is offering bulk volume,” said Alagendran. “Kharif sowing is lower compared with last year. This has also made exporters being conservative in their offering,” he said.
While the crop situation is seen as bad in Karnataka, it is reported to be good in Andhra Pradesh.
According to the Agriculture Ministry, kharif maize sowing is lower by one per cent at 71.3 lakh hectare compared with the same period a year ago.
The data show that area is higher in Andhra Pradesh, Bihar, Madhya Pradesh, Jharkhand and Maharashtra, while in Karnataka it is 15 per cent lower.
PRICE OUTLOOK
With traders being bullish, corn prices could witness some correction after the second week of September. “Some correction has to happen,” said Alagendran.
Prices could then gain as kharif arrivals are likely to be late and with rain now lashing most parts of the country, the moisture content in the crop could be high.
“The new crop will be delayed slightly and could arrive in November,” said Madan.
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