The Hindu Business Line : Maize prices may remain volatile in short term

Coimbatore, March 30 Maize prices are expected to remain high in medium and long term, though they may be volatile in the short term, thanks to all round higher consumption demand, according to two delegates from the US associated with the US Grains Council who recently travelled to India meeting the members connected with the starch, poultry and feed sectors.

The US members, Dr Simla Tokgoz, a research associate at Food Agriculture Policy Research Institute (FAPRI) at Iowa state university, and Mr Ken Wardsworth, a farmer member of the Council from Michigan state, pointed out the increased commodity price was not on account of biofuels only.

The growing economy in countries such as India, China and Brazil was behind the increased commodities prices, they noted.

A higher demand of meat, milk and eggs by high-income middle class in the country is a factor in this increased demand of corn in India, a US Grains Council’s report quoted the two as saying in their recent interaction with the industry delegates consuming maize.

The US members visited Ahmedabad, Mumbai and Coimbatore to meet the members of the poultry, feed and starch industries. According to Dr Simla, China would in near future not sell its maize as its domestic demand was rapidly growing.

In the case of India, despite increased domestic maize production, its rising demand due to increased needs from poultry, starch and dairy sectors, will turn it a net importer by 2015. The demand in Brazil too was high where livestock production was on the rise due to increased investments and export opportunities of value added products.

The US crop would be enough to supply to the world needs though there would be increased usage of maize for bio-fuel production following the mandate by that country to produce 15 billion gallons (56.7 billion litres) by 2020.

The end-users of maize will need to change the way they do business and hedge in the futures market to manage risks. They will need to add different value to their products in their portfolio to increase profitability, the Council’s report quoted them as saying in their ‘maize presentation’ to the Indian end-users.

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