The Hindu Business Line : Maize prices drop on hopes of better kharif crop

Coimbatore, Sept.10 South-based poultry companies are set to breathe easy as maize prices have began to decline, in anticipation of the new crop next month.

The integrated poultry operators are likely to gain a perceptible cost advantage from the fall in prices of maize, the key ingredient in poultry feed.

From the peak rate at around Rs 8,000-8,500 per tonne which prevailed till last month, maize price declined in the last three weeks to Rs 7,000-Rs 7,300 last week.

The tumbling price is on account of an anticipated increase in the new crop, likely to hit the market from middle of next month, according to poultry trade sources.

“We expect the maize price to sober further and rule between Rs 6,500 and Rs 7,000 once the new crop starts arriving in the market next month onwards.

This would mean that the poultry sector will have a moderate reduction in its production cost on account of a lower raw material cost,” said Mr Lakshmanan, President of Palladam-based Broiler Coordination Committee (BCC).

Poultry producers may breathe easy with improved market environment for their finished products, namely the broiler chickens and shell eggs, coupled with easing raw material supply.

According to Mr Lakshmanan, the broiler sector anticipates a 10 per cent reduction in the maize price as the overall price for the commodity this time may just cruise along the minimum support price of Rs 620 per quintal fixed by the Centre.

He also anticipates that soyameal, another crucial feed ingredient for the poultry producers, which is quoting around Rs 13,000 per tonne, is likely to rule lower in the Rs 11,500-Rs12,000 band, in view of favourable crop climate. Soyameal occupies the next bulk ingredient after maize in the poultry feed mixing used by the boiler sector.

The corn price, on the US commodity board of trade, last week was quoting lower at $130.38 per tonne for the September delivery and $134.40 per tonne for December deliveries respectively.

The US Grains Council India market reports indicate the trade estimated the US crop at 333.32 million tonnes, higher than the maize production estimates from the US Department of Agriculture which projected the crop at 331.57 million tonnes.