New supplies push down corn prices

PUNE: A downward trend in corn prices has set in with the availability of a new crop. But spot prices are still higher than last year’s and may remain firm in 2012-13 due to a strong export demand. Maize spot prices increased from Rs 1,260 per quintal in July first week on the Nizamabad market and reached their peak of Rs 1,585 per quintal by August end.

September onward, prices started a downward trend reaching a low of Rs 1,454/quintal on Tuesday . “Prices have come down as new arrivals have begun just two days ago,” said T Prabhakar, a trader at the Nizambad market. June, July and August are a lean period for corn when prices usually show an uptick. They come down from September, reaching a low in November and increasing again from December. But the current spot price of Rs 1,454 per quintal is 25% higher than the spot price of Rs 1,168 per quintal on the same day of last year.

Indian corn prices were at a record high in 2011-12 due to a substantial increase in exports. “Maize export usually takes place only till April. But this year, due to the weak Indian rupee, export continued till June, creating fears of a shortage in domestic market. This pushed domestic prices to a high,” said Uddhav Ahire, chairman, Anand Hatcheries Group, which does contract farming in north Maharashtra. According to the Union ministry of agriculture , kharif area for corn has declined from 7.54 million hectare to 7.40 million hectare. Still, production is expected to remain at last year's level. Though there will be no shortage in the domestic market, the long-term price trend is likely to remain bullish due to a robust export demand.