Agri Business

Rising maize prices give the jitters to poultry farmers

Vishwanath Kulkarni Bengaluru January 16 | Updated on January 16, 2019 Published on January 16, 2019

A farmer weeds his maize/corn crop before transporting it to a local market at Undavalli near Vijayawada, on Friday CH VIJAYA BHASKAR

Feed manufacturers have asked Commerce Ministry to allow duty free import of corn

Maize prices are on the boil on reports of lower crop in the kharif 2018 season. The infestation of the dreaded pest Fall Army Worm (FAW) (Spodoptera frugiperda), coupled with weak monsoon rains witnessed in key producing States such as Karnataka and Telangana have shrunk the maize output this year.

Maize prices, which hovered around ₹1,100-1,200 a quintal at the beginning of October are now ruling between ₹1,700-1,800 levels across several markets in Karnataka. In fact, the modal maize prices in some markets had crossed ₹1,900.

 

The Centre had fixed an MSP of ₹1,700 per quintal for maize for the kharif 2018-19 season.

The rising trend in maize prices has brought cheers to the farmers, but has made the consuming industries such as the poultry sector and starch makers jittery, triggering demand for duty-free imports of corn.

The Agriculture Ministry, which had pegged the kharif maize production at 21.47 million tonnes (mt) in its first advance estimates, higher than the previous year’s 20.24 mt , is yet to quantify the crop losses arising out of the FAW infestation and drought conditions.

The FAW, which made its presence felt initially in the maize crop in Karnataka's Shimoga district during July-August last year has since expanded its reach to neighbouring States such as Telangana, Andhra Pradesh, Tamil Nadu and Maharashtra.

Last month, Parshottam Rupala, the Agriculture Minister for State told the Parliament that FAW had affected maize crop in approximately 81,000 hectares in Karnataka, 1,740 hectares in Telangana, 1,431 hectares in Andhra Pradesh and 315 hectares in Tamil Nadu.

“Though the yields have been impacted, the farmers are happy with the higher prices this year,” said Chandrakant Sangur, a farmer in Haveri district. However, the prices could reverse the trend if imports are allowed. For the past couple of years, farmers have been impacted by lower maize prices, he said.

The poultry sector is already feeling the heat of rising maize prices.

Also, soya prices have been firming up resulting in higher feed costs for the poultry players. “Imports are an immediate solution in the short term, but in the long-term the thrust should be on increasing productivity, while diversifying into newer areas -- mainly the eastern parts of the country and also in the traditional rice and wheat belts,” said Raghavan Sampathkumar, Executive Director, Compound and Livestock Feed Manufacturers Association (CLFMA) of India.

CLFMA has already submitted a memorandum to the Commerce Ministry seeking duty free imports of corn. “If the Centre allows imports, we expect at least one million tonne of corn to be imported this year,” said B Soundararajan of Suguna Holdings Pvt Ltd

But the industry may find sourcing non-genetically modified corn a challenge in the global market.

Analysts said the trade has to look at sources like Ukraine and Africa to source non-GM corn. Soundararajan said rising feed prices has resulted in an increase in production cost of ₹4 per kg for chicken, which some players are passing it on to consumers.

However, in the case of eggs, the poultry players are unable to pass on the hike due to higher supply in the market.

Ashok Kumar of MAA Integrators said the feed makers have stocked up to meet their immediate requirements for the next 2-5 months and that a clearer picture will emerge by April-May when the rabi crop hits the markets.

Already, the rabi sowing of maize is down by around a tenth, in line with the broader trend on account of poor soil moisture levels owing to weak monsoon. Maize has been planted in 13.61 lakh hectares till January 11 as against 15.14 lakh hectares in corresponding last year.

Published on January 16, 2019
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