Feed-grade maize turns costlier than wheat

Chickenfeed is far from that. Today, it is probably as, if not more, expensive to feed chicken than humans!

Feed-grade maize, or corn, sells at Rs 1,230-1,240 a quintal, which is more than the Rs 1,150-1,200 for wheat in most mandis near key producing centres.A year ago, maize ruled at Rs 960-980, while wheat quoted over Rs 1,250.

. On the futures market, too, maize is ruling above wheat. The most actively traded maize contract for July delivery quotes at Rs 1,306 a quintal against Rs 979.30 during the same time last year. In the case of wheat, the actively traded contract for delivery in July is quoting at Rs 1,197.80 against Rs 1,223 a year ago.

Far-month contracts of maize for delivery in September are ruling at Rs 1,332 for maize (Rs 988). In the case of wheat, they are traded at Rs 1,244.20 (Rs 1,266.40).

The trend is similar globally too, with the July corn contract at the Chicago Board of Trade quoting, for the last one week, higher than the corresponding futures price for wheat (See chart).

This is the first time since 1996 that the wheat-corn spread has turned negative over a sustained period — contrary to the general perception that wheat, being a foodgrain, would trade at a healthy premium to corn.

Corn prices have surged on multiple floods hitting the crop in the US, the biggest producer, lower carryover stocks and demand for ethanol.

Given that an estimated 60 per cent of India's corn production is turned into poultry and animal feed, would the relative cheapness of wheat lead to its displacing the former as the preferred food for chicken and livestock? Not yet, says Mr Balram Yadav, Managing Director of Godrej Agrovet Ltd, the country's largest feed miller, which consumes half a million tonne of corn every year.

“Corn has a calorific value of 3,400 Kcal/kg, which is more than the 3,080 Kcal/kg for wheat. So, in terms of energy equivalent, wheat prices have to drop to below 90 per cent of corn for being viable to be incorporated into compounded feed formulations,” says Mr Yadav.

However, Mr K.S. Ponnusamy, a feed producer in Tamil Nadu's Namakkal district, says that if the landed price of wheat is on a par with maize price then they would go for equal mix of wheat and maize.

COMMENT NOW