Corn prices to stay bullish this season

Delayed supplies boost prices

Adelayed crop with high moisture content has ensured corn prices will remain bullish unlike the previous years during this period. Supplies have been delayed by a fortnight thereby supporting the prices. Over 16% of the crop is now available in markets across Madhya Pradesh, Maharashtra, Karnataka and Andhra Pradesh.

Traders buy for immediate consumption

An increase in the minimum support price by Rs 100 to Rs 980 a quintal this marketing season has ensured prices in the Nizamabad market to be between Rs 960 and Rs 980 a quintal compared to Rs 900 to Rs 950 a quintal in the same period last year. Rains during the harvesting period have increased the moisture content to 30-50% in Chitradurga and Ranebennur regions of Karnataka. Prices in Karnataka are touching Rs 1,100 now.

Prices in Maharashtra's Sangli are at Rs 1,100 a quintal and in Jalana market at Rs 1,000 a quintal. Traders and companies are now procuring for immediate consumption. Thanks to the festival season, sales have been on hold and are likely to pick up in a fortnight.

Exporters expect increase in orders

With global prices higher than Indian prices, exporters are expecting an increase in corn and starch export this year. Orders for over 5 lakh tonne have been booked for November-December delivery. Export contracts were signed at Rs 1,230 to Rs 1,260 a tonne FOB. Exporters are currently waiting for prices to further go down before signing more contracts. Exports are largely going to South East Asian countries like Malaysia and Vietnam.

In 2010-11, India exported over 2 million tonne. Prices had dropped earlier this month after the new harvest but have now firmed up. Corn for December delivery rose 3.50 cents to $6.55 a bushel on the Chicago Board of Trade.

Slight correction likely when availability rises

Prices are likely to remain robust this year, say traders and companies. They expect a slight correction of Rs 100 when arrivals picks up but this would sustain for a short duration with exporters, starch and poultry industries buying the grains. In 2010, prices had been bearish till December before touching the year-high of Rs 1,250 a quintal in August this year.