Agri Business

Imports to keep maize prices under check

Vishwanath Kulkarni Bengaluru | Updated on June 24, 2020

The Centre’s decision to allow import of 5 lakh tonnes of corn at concessional duty of 15 per cent is expected to slow down the pace of recovery in maize prices that had crashed to as low as ₹1,100 per quintal in recent months, after the Coronavirus scare impacted poultry sector badly. Maize had recovered a bit in the past few weeks after poultry sales had seen some recovery in the retail segment

Also, the move to allow imports is at a time when farmers are bringing more area under maize cultivation across States such as Karnataka and Madhya Pradesh among others. The area under maize as on June 19 has more than doubled to 10.48 lakh hectares as against 5.18 lakh ha in the same period last year, according to Agriculture Ministry data.

No price parity

However, the prospects for maize imports, as of now, look remote due to the lack of price parity. “Imports are not possible now as the domestic prices are cheaper than international prices,” said B Soundararajan, Managing Director of Suguna Group, a major poultry player. The landed price of non-genetically modified corn from Ukraine is quoted around $220-225 per tonne, roughly ₹17,500-18,000 per tonne, exclusive of 15 per cent duty.

Further, the imports are likely to keep domestic prices under check going ahead. “We may not see the abnormal price levels of ₹2400 per quintal witnessed last year. Prices may not go beyond ₹2,000 per quintal,” Soundararajan said.

Prices of corn in the country are ruling between ₹1,250-1,600 a quintal across various markets, much below the minimum support price of ₹1,760 for the 2019-20 season. For the 2020-21 season, the Centre has hiked the MSP to ₹1,850 per quintal. In Bihar, a major producer of corn during rabi season, prices are ruling at ₹1,250 a quintal. In States such as Karnataka and Tamil Nadu, where farmers are still bringing last year’s kharif maize, prices are hovering between ₹1,250-1,600 per quintal.

About 60 per cent of the 28 million tonnes of maize produced in the country is consumed by the poultry sector. The slump in poultry demand due to the Covid scare has hit the growers hard, prompting some States such as Karnataka, a major producer, to announce a cash relief of ₹5,000 per maize grower to tide over the crisis.

Farmers worried

“The move to allow maize imports at a time when production is on the rise and will spell trouble for farmers,” said Kodihalli Chandrashekar, president of the Karnataka Rajya Raitha Sangha. Imports along with the APMC and land reforms will spell trouble for farmers in the State, he said.

Further, Soundararajan said poultry sector has started seeing a slow recovery in demand, mainly from the retail segment. The institutional demand from hotels and restaurants is yet to pick up as lockdown is yet to be eased.

Published on June 24, 2020

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