M. R. SUBRAMANI, THE HINDU BUSINESS LINE
CHENNAI, SEPT. 15:
Currenty, maize (corn) for delivery to exporters in November is quoted at $220 or Rs 13,950 a tonne f.o.b. If this is worked backwards, then its price could be lower than the minimum support price of Rs 1,310 a quintal fixed for this year. In turn, it could leave the Government, which is headed for elections in six months time, in a fix to ensure that growers get at least the support price.
Excess and even spread of rainfall during the current monsoon could have brought smiles to the faces of farmers. But in the case of coarse cereals, it is also bringing in an additional problem on the prospect of a higher, if not a record, production.
“Rains have been good in areas where coarse cereals are grown,” says Amit Sachdev, a consultant for the industry on cereals.
“There are some reports of damage in a few places but I don’t see that affecting the final outcome,” said Sachdev.
“Good rains could ensure a bumper crop in States such as Maharashtra. Compared with 2011, when we had a record crop, it could be one-and-a-half times,” said E. Govindarajan, an exporter.
According to the Ministry of Agriculture, 80.74 lakh hectares (lh) have been brought under maize against 73.37 lh last year and the normal 72.28 lh. Bajra has been planted on 74.42 lh against 60.64 lh last year and the normal 89.27 lh.
Overall, coarse cereals coverage has increased to 192.14 lh against 173.85 lh last year. This is marginally lower than 195 lh covered at this time of the year.
Maize cultivation has increased sharply in the last 4-5 years with the introduction of new hybrids whose yield is high. Also maize, being a sturdy crop, requires less amount of water and is generally free from pest attacks.
Some of the coarse cereals have lost out to crops such as guar in States such as Rajasthan as farmers find the latter more profitable. On its part to encourage farmers grow more coarse cereals, the Government raised the support price of maize and bajra to Rs 1,310 a quintal from Rs 1,175 last year. For ragi, the price has been left unchanged.
“The problem with maize this year is the projection of record crop in the US. The Black Sea region crop, particularly Ukraine, is also good. The world could face a glut as far as maize production is concerned,” said Govindarajan.
US corn is quoted at $235-45 a tonne for November delivery in the Far-East, while Indian corn is offered at $230-35.
One advantage India enjoys is that it is able to delivery in smaller lots, while exports from the US and other American countries are in bulk only.
“But this year, the crop in Myanmar is good. It enjoys far better advantage being a least developed nation,” says Govindarajan.
Countries such as Vietnam and Indonesia allow imports of Myanmar corn at 5 per cent Customs duty, whereas the duty for Indian corn is 35 per cent.
“We see maize prices under pressure this year and you can see the trend,” says Sachdev.
On the National Commodities and Derivatives Exchange, maize November contracts are currently ruling at Rs 1,269 a quintal and December at Rs 1,270.
In the spot, maize is ruling at Rs 1,515 a quintal in centres such as Davengere in Karnataka.
“Even other coarse cereals, particularly Bajra, could head towards a record crop,” said a trader.
“This year being one when we are facing elections, the Government may have to come up with a market intervention operations to keep the prices at the support level,” said Govindarajan.
The last time the Government intervened in the maize market was in 2007 when the produce was procured by the National Agricultural Marketing Federation from growers in Orissa. Since then, Indian maize has found many takers abroad with exports totalling 48.66 lakh tonnes last fiscal. In addition, the poultry industry’s consumption of maize as feed has increased rapidly, reducing the need for any Government intervention in the market.
On the Chicago Board of trade, corn prices which had ruled at over $6 a bushel at one point of time are now ruling below $5. On Friday, corn futures maturing in December ended at $4.59.
“The fall could have an impact here,” said a trader.
CHENNAI, SEPT. 15:
Currenty, maize (corn) for delivery to exporters in November is quoted at $220 or Rs 13,950 a tonne f.o.b. If this is worked backwards, then its price could be lower than the minimum support price of Rs 1,310 a quintal fixed for this year. In turn, it could leave the Government, which is headed for elections in six months time, in a fix to ensure that growers get at least the support price.
Excess and even spread of rainfall during the current monsoon could have brought smiles to the faces of farmers. But in the case of coarse cereals, it is also bringing in an additional problem on the prospect of a higher, if not a record, production.
“Rains have been good in areas where coarse cereals are grown,” says Amit Sachdev, a consultant for the industry on cereals.
“There are some reports of damage in a few places but I don’t see that affecting the final outcome,” said Sachdev.
“Good rains could ensure a bumper crop in States such as Maharashtra. Compared with 2011, when we had a record crop, it could be one-and-a-half times,” said E. Govindarajan, an exporter.
According to the Ministry of Agriculture, 80.74 lakh hectares (lh) have been brought under maize against 73.37 lh last year and the normal 72.28 lh. Bajra has been planted on 74.42 lh against 60.64 lh last year and the normal 89.27 lh.
Overall, coarse cereals coverage has increased to 192.14 lh against 173.85 lh last year. This is marginally lower than 195 lh covered at this time of the year.
Maize cultivation has increased sharply in the last 4-5 years with the introduction of new hybrids whose yield is high. Also maize, being a sturdy crop, requires less amount of water and is generally free from pest attacks.
Some of the coarse cereals have lost out to crops such as guar in States such as Rajasthan as farmers find the latter more profitable. On its part to encourage farmers grow more coarse cereals, the Government raised the support price of maize and bajra to Rs 1,310 a quintal from Rs 1,175 last year. For ragi, the price has been left unchanged.
“The problem with maize this year is the projection of record crop in the US. The Black Sea region crop, particularly Ukraine, is also good. The world could face a glut as far as maize production is concerned,” said Govindarajan.
US corn is quoted at $235-45 a tonne for November delivery in the Far-East, while Indian corn is offered at $230-35.
One advantage India enjoys is that it is able to delivery in smaller lots, while exports from the US and other American countries are in bulk only.
“But this year, the crop in Myanmar is good. It enjoys far better advantage being a least developed nation,” says Govindarajan.
Countries such as Vietnam and Indonesia allow imports of Myanmar corn at 5 per cent Customs duty, whereas the duty for Indian corn is 35 per cent.
“We see maize prices under pressure this year and you can see the trend,” says Sachdev.
On the National Commodities and Derivatives Exchange, maize November contracts are currently ruling at Rs 1,269 a quintal and December at Rs 1,270.
In the spot, maize is ruling at Rs 1,515 a quintal in centres such as Davengere in Karnataka.
“Even other coarse cereals, particularly Bajra, could head towards a record crop,” said a trader.
“This year being one when we are facing elections, the Government may have to come up with a market intervention operations to keep the prices at the support level,” said Govindarajan.
The last time the Government intervened in the maize market was in 2007 when the produce was procured by the National Agricultural Marketing Federation from growers in Orissa. Since then, Indian maize has found many takers abroad with exports totalling 48.66 lakh tonnes last fiscal. In addition, the poultry industry’s consumption of maize as feed has increased rapidly, reducing the need for any Government intervention in the market.
On the Chicago Board of trade, corn prices which had ruled at over $6 a bushel at one point of time are now ruling below $5. On Friday, corn futures maturing in December ended at $4.59.
“The fall could have an impact here,” said a trader.
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