The Hindu Business Line : Maize prices may rule above Rs 600 a quintal until next June

RISING incomes in the developing world and consequent growth in meat and poultry consumption have spiralled the demand for maize, more as a livestock feed.

Industrial sources, which depend on maize, have expressed concern about the availability and price of maize. The Domestic and Export Market Intelligence Cell at the Centre for Agricultural and Rural Development Studies (CARDS), which has observed the price movement of maize between 1998 and 2005, envisages a steep rise in the price levels of up to Rs 635 a quintal till October-end before sliding to around Rs 611 a qunital in November and further down to Rs 600 a qunital in December. Market sources expect the declining trend to continue till end of June 2006.

A closer look at the maize price movement in the Udumalpet market in Tamil Nadu (said to be one of the biggest maize market in the country) reveals that this commodity was quoting just below the Rs 400 a quintal- mark in 1998, but within a span of 15 months peaked to Rs 680 a qunital before dipping to the Rs 400-a-qunital level in March 2001.

Since then, the price of maize has only continued to rise. In 2004-05, it showed very high level of fluctuation, quoting between Rs 490 and Rs 680 a qunital.

Industry watchers foresee a global shift in cereal demand by 2020. In the developing world alone, its demand is expected to rise to over 500 million tonnes in 2020 compared to 282 million tonnes in 1995.

USDA trade estimates have predicted a continuous increase in demand from the poultry and starch sector. In India, the crop was raised in 7 million hectares in 2004-05 and the yield hovered around 1.8 tonnes a hectare, which according to trade sources was well below the average yield levels of China (4.4 tonnes a hectare) or Thailand (3.2 tonnes a hectare).

"The country's maize production fluctuates between 10 and 14 million tonnes with 80 to 90 per cent of the production taking place in the kharif season," the CARDS Director, Dr N. Raveendran, said.

Market sources estimate the annual requirement at over 13 million tonnes based on current usage in poultry, livestock, starch and food, but without taking the exports to Bangladesh, Nepal and Sri Lanka into account.

Growers have expressed concern over the disparity in the price level of this agricultural produce, Dr Raveendran said.

To enable growers get a remunerative price, the Domestic and Export Market Intelligence Cell has advised those who had planted during June-August season to release the stock immediately and cautioned the growers against choosing the maize crop during September-October period (as the price is expected to decline during harvesting period). "They can sow during January-February, and anticipate a better return at harvest, when they offload the stock around July," he explained.

Meanwhile, poultry and livestock farmers appear to be the most concerned lot. "We are unable to use wheat, sorghum or pearl millet on a large scale in poultry rations because of the rising rates of these commodities," industry sources say.

The sources further said if either the availability of coarse cereal did not improve or the price stabilise, the cost of production of chicken in south India (under integration) would rise. "At present, the production cost per kg of chicken is Rs 27. A small increase in feed cost by Re 0.50/kg would increase the production cost by Re 0.87/kg," they said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Maize prices may rule above Rs 600 a quintal until next June

Petrol to cost Rs 3 more, diesel Rs 2
LPG, kerosene spared; Govt to issue oil bonds to offset losses

Cairn consortium block — HPCL emerges front-runner for crude oil purchase

LG unveils DTH-ready TV — Aims to tap market of 40 million households

PC sales cross 10 lakh units in first quarter

Aiyar disapproves of public spat