The Hindu Business Line : NECC reiterates demand to ban maize, soya futures

Coimbatore, May 27 The concept of forward trading is a western one and it may not work in Indian conditions where majority of farmers do not possess holding capacity to derive benefit from forward trading, the National Egg Coordination Committee (NECC) has said while urging the Centre to withdraw futures in maize and soya.

The committee, a known opponent to commodity futures trading, has blamed it for the unbridled rise in the prices of maize and soya – the two key commodities widely used in poultry feed manufacture.

The NECC, in a communication to the Union Government, has pointed out that the system of forward trading may work in developed economies such as the US where the farmers by virtue of their large holdings do enjoy capacity to hold foodgrains. But the same is not the case in India where majority of maize or soya growers are marginal farmers and do not have the capacity to hold their produce and they sell away their harvest at low prices to the traders who taking advantage of the forward trading to jack up their prices.

Poultry farmers were hit by the “unprecedented” increase in the maize and soya prices in the past two years and the maize which was ruling in the price band of Rs 500-525 a quintal rose to Rs 900 and in some places the price has gone up to Rs 1000. Soya meal prices more than doubled from Rs 7000-8000 a tonne to Rs 19,000. This is despite the increase in the domestic production of maize this year to 16.8 million tonnes from last year’s 14 million tonnes. The main reason for the price increase is the speculative trading provided by the forward trading.

Due to the steep increase in the poultry feed ingredient prices, the egg production cost has increased in the last 12 months from 90 paise-Re 1 to Rs 1.80/Rs 1.90 per egg and in the case of broilers, it spurted from Rs 27-28 a kg to Rs 40-41. Poultry farmers are continuously losing and unless the situation is remedied, 50 per cent of the poultry industry would be wiped out, NECC said. It also wanted the export of these commodities be streamlined by canalising the commodities exports through a government designated agency.

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