A higher crop amidst weak demand from the key consuming sector of poultry, rabi maize prices are under pressure at the start of the harvest season in major producer Bihar. Trade sources said prices are already down in Gulabbagh, the key market in Bihar at the start of harvest season.
“Maize prices have come down by about 15 per cent over the past week and are hovering around ₹2,010 per quintal. We expect the prices to slip below the minimum support price (MSP) level of ₹1,962 as the harvest progresses and arrivals pick up over the next few weeks,” said Tarun Satsangi, AGM and head of Commodity Research at Origo eMandi. In other markets of Telangana, maize prices are hovering around the MSP levels.
Satsangi said the demand for maize from the domestic poultry sector is muted as the offtake is yet to revive. At the same time, the exports have been sluggish due to the higher global supplies and weak demand from China due to the prevailing flu situation there. Indian corn prices on FOB basis are at $291 per tonne, while Argentina is $301 and Brazil at $288. “With Indian corn at parity, we can expect a pick-up in export demand in the coming days,” he said.
As per Origo’s estimates, the rabi maize crop for 2022-23 is higher by about 20.3 per cent at 10.59 million tonnes (mt), over previous year’s 8.8 mt. This is mainly on account of higher production in Bihar, West Bengal, Tamil Nadu, Maharashtra and Karnataka.
The second advance estimates of Agriculture Ministry has pegged the rabi maize output at 10.78 mt higher than the target of 10.1 mt, but marginally lower than previous year’s 11 mt. Total maize output for 2022-23 as per Ministry estimates are higher at 34.6 mt compared with the previous year’s 33.7 mt.
With maize prices under pressure, a section of farmers may prefer to hold back their produce and sell later. “After realising all-time high prices last year, farmers are hoping that the prices will move up to match last years’ levels. With the progress in harvest and pick up in arrivals in the next few weeks, we expect farmers to hold and sell,” said Kishor Kumar Jha, CEO & Director of Ergos, which offers warehousing services in some 174 locations across 24 districts in Bihar serving some 7,000 villages.