The Hindu Business Line : Zero duty maize imports to arm poultry's feed option

Emerging scenario
Compared with the domestic price of Rs 8,200 a tonne, landed prices of imported maize could be Rs 10,000 a tonne.
After two months, global prices could dip $20 and domestic prices may rise.

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Coimbatore Jan. 26 The Centre permitting duty-free import of maize may not seem to be of immediate consequence to domestic end-users because of lack of parity between the domestic corn price and that of the imports. But the free import facility has given the country's largest maize-consuming segment — the poultry — with a sure option of importing corn when it is in dire need to cover the feed raw-material, sources in the poultry market say.

``If the domestic maize prices go up further - which looks imminent in view of the shortfall of about 3 million tonnes this year - the poultry sector will have to import corn either from the US or Brazil, the only two available sources for imports,'' said Mr B. Soundarajan, Managing Director of Suguna Poultry Farm. He said the currently international maize price at $160 a tonne and an additional freight/handling cost of $40 worked out to a total import cost of Rs 10,000 a tonne compared with the domestic price of Rs 8,200.

But the industry expects the international price to go down by $20 during April/May when India too would be gearing up to import.

``After two months or so, we may also see the domestic maize prices go up. The maize at Rs 8,800-Rs 9,000 a tonne at `zero' import duty would then be seen to have parity with the local price,'' Mr Soundarajan said.

Supply gap

The poultry sector would be left managing a supply gap of three-months maize requirements in any case and it is likely that 1-1.5 million tonnes of maize may be imported by the poultry sector.

``The import of maize allowed duty-free has certainly given an option to the poultry sector. Though the import price may not have parity, in a given situation the Government had done wisely by removing tariff rate quota for maize,'' said Mr Lakshmanan, President of the State's Broiler Coordination Committee.

Broiler chicken producers are particularly aware of the shortage of maize, considering the fact that within the poultry sector, broiler producers consume higher volumes of maize as feed component.

In the current maize price at Rs 8,100 a tonne, the broiler production cost is at Rs 31 per kg. In the event of the maize cost touching Rs 10,000 a tonne as feared by the industry, the production cost would go up by another Rs 2 to Rs 33 per kg.

In the prevailing environment, instead of worrying too much on the raw material front, the poultry sector should prepare the ground to stabilise the end-product pricing by linking it with the input costs.

The industry would have accomplished its task if it can stabilize at the selling end the end-price of broiler at Rs 35-40 a kg, the BCC president said.

(The BCC has posted Re 1 higher to Thursday's farm-gate broiler rate of Rs 40 per kg).

Paddy, another option

Triggered by spiralling maize prices, the layer egg farmers in Namakkal zone are seriously considering adding paddy to the list of poultry feed ingredients to widen the choice of grains in the feed-mix.

``Though we are not sure of the economic sense in taking whole rice (paddy) as a poultry feed-mix, it can be an interim measure to overcome the shortage of maize in the present context,'' said Dr P. Selvaraj, National Egg Coordination Committee's Namakkal Zonal chief .

Duty-free maize imports allowed by the Centre, though a good move, may not be of immediate benefit to the poultry sector and the long-term solution would be removing maize from the list of commodities permitted in futures trading and bring a levy on export of maize, he said.

More Stories on : Poultry | Exports & Imports | Foodgrains

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