Maize prices may ease from August on global supply

Maize prices in India are likely to ease from August onwards as global supply increases, making Indian exports unviable due to higher export prices.

The prices are also likely to be pressurized by expectations of higher kharif production on normal monsoon forecast by the Indian Meteorological Department (IMD), an expert said here on Thursday.

Despite bad monsoon, Indian crop output in the 2012-13 marketing year, ending August 2013, stood at 218.2 lakh tons as per the farm ministry's third advance estimate, as against 217.6 lakh tons a year earlier, said Raju Choksi, Vice President (Agro-Commodities), Anil Nutrients Ltd, a subsidiary of the Rs 650 crore agro and food processing major Anil Ltd.

“Global supply of maize is likely to rise following record crop in Argentina and Brazil, who compete with India for exports to Vietnam, Indonesia and Malaysia. Exports from Argentina and Brazil has already started replacing Indian crop due to higher prices,” he said.

With monsoon rains already covering entire country much ahead of schedule and forecast of normal monsoon, acreage and output in kharif 2013 is also expected to be higher, which would further put pressure on the prices going forward.

“By August, enough data would be available to know the progress of sowing of maize. If monsoon progresses as per current schedule, the output is likely to be higher by at least 5-7%, which would impact the prices in subsequent months,” Mr. Choksi said.

However, early monsoon has also impacted the rabi crop in Bihar, thereby affecting the Indian exports. Crop quality in Bihar has worsened due to early rains. This is likely to support the prices in the near term. But improved global supply scenario and expectations of higher kharif output would play their part subsequently, he added.

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