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Maize (corn) prices have increased by ₹100-150 a quintal in the past month on higher export demand for the coarse cereal from countries such as Vietnam and Malaysia.
“There is demand for export to Vietnam and Malaysia. This is a usual demand that is seen before the arrival of the Rabi crop,” said Bimal Bengani, Managing Director of Kolkata-based exporting house Bengani Food Products Pvt Ltd.
According to Ministry of Agriculture and Farmers’ Welfare Ministry data, maize is ruling at different prices depending on quality and production region, ranging between ₹1,350 per quintal in Karnataka and up to ₹1,700 in Tamil Nadu.
The prices at the Agricultural Produce Marketing Committee (APMC) mandis are, however, lower than the minimum support price of ₹1,850 a quintal fixed for the current crop year (July 2020-June 2021).
“Though there is demand for exports to Far-Eastern countries such as Vietnam, domestic demand is also driving prices higher,” said Chennai-based Rajathi Group Director Madan Prakash. The group exports agricultural products.
“Maize prices have increased over ₹100 in the past month. It costs ₹1,700 a quintal at Namakkal. Until last month, we were getting it at ₹1,550,” said Tamil Nadu Egg Poultry Farmers Marketing Society (PFMS) president Vangili Subramanian.
Demand from Vietnam and Malaysia has been continuous, said Bimal Bengani.
“Shipments have been carrying on. About two to 2.5 lakh tonnes of maize are exported every month to these two destinations,” the Kolkata-based firm’s managing director said.
Madan Prakash concurred with the view saying: “We are exporting close to 2,000 tonnes every week to these destinations. We are witnessing a good demand,” he said.
The Rajathi Group director said that his company was getting maize at ₹16,500 a tonne free-on-rails in Mumbai. “Prices are up by ₹1,000 a tonne since last month,” he said.
PFMS’ Subramanian said maize prices have increased since production is expected to be lower than initial estimates. “At least in Tamil Nadu, the production seems to be lower than our initial expectations,” he said.
Kharif maize production is estimated higher at 19.88 million tonnes (mt) this crop year against 19.68 mt during last year’s kharif season.
According to the second advance estimates released by the Ministry of Agriculture and Farmers’ Welfare on Wednesday, maize production is pegged at a record 30.16 mt against 28.64 mt last year.
Though shipments are mainly to Vietnam and Malaysia currently, this fiscal maize exports have already touched a six-year high thanks to Bangladesh and Nepal.
According to Agricultural and Processed Food Products Development Authority (Apeda) data, maize exports during the April-November period of the current fiscal were 14.18 lakh tonnes (3.70 lakh tonnes).
Maize exports had touched the 10-lakh tonnes mark in 2018-19. The shipments touched a record 47.88 lakh tonnes during 2012-13 and since then there has been a downswing. The highest volume exported before this fiscal was in 2014-15 when 28.25 lakh tonnes were shipped out.
During the April-November period, Bangladesh bought 9.95 lakh tonnes of Indian maize, while Nepal purchased 3.38 lakh tonnes.
“Bangladesh has stopped importing Indian maize since its crop is set for arrival,” Bimal Bengani said.
One of the reasons for Indian maize exports doing well this year is its competitiveness in the global market. But for container shortage and non-availability of liners, exports could have been higher.
Even if Indian maize is offered at, say, ₹17,500 ($241.90) a tonne free-on-board, other destinations are offered at higher prices free-on-board. If shipment charges are added, Indian maize exports clearly enjoy an advantage.
According to the International Grains Council, the US is offering at $251 (₹18,150) from the US Gulf, Argentina at $246 (₹17,800) and Brazil at $261 (₹18,900) a tonne. Prices are up 41-45 per cent, though they are currently off 52-week high by $6 to $15.
PFMS’ Subramanian said maize prices are unlikely to rise further as poultry growers could find substitutes for feeds in broken rice and other coarse cereals such as jowar and bajra.
“Though maize stocks in Tamil Nadu are low, we are getting stocks from Andhra Pradesh,” he said.
“The current prices are apt for both maize growers and poultry farmers. Lower maize prices might force growers to shift to other crops, while poultry farmers’ production costs will rise further to the already rising prices such as soyabean,” said Subramanian.
Last year, maize prices surged to ₹2,600 a quintal, resulting in domestic users importing the coarse cereal. India imported 3.18 lakh tonnes last season, 10 times the shipments into the country during 2018.
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