Maize prices in India are likely to remain subdued on increased global supply

KOLKATA: Maize prices in India are likely to remain subdued on increased global supply as US awaits record harvest this year. The prices will also be impacted by record domestic production, which is expected to touch 25 million tonnes. The production in US is likely to be 353.7 million tonnes, around 29% higher compared to last year, a recent report from US Department of Agriculture (USDA) showed.

Record US production will increase global trade and therefore demand for Indian maize in export market has been hit, which is fuelling domestic supply. Apart from US, production in China and European Union too is expected to jump 5.5% and close to 10% respectively, USDA report showed.

"Export prices in the global market have tumbled since last two-three months as new crop arrivals rise from across major producers. Due to increased global supply, exports from India have become unviable, which has resulted in domestic crop flooding the local markets. We believe this situation is likely to persist till next season as Rabi sowing too is higher than last year," Mr. Raju Choksi, Vice-President (Agri-Commodities), Anil Nutrients Ltd. said.

Maize was sown on 15.53 lakh hectares in ongoing Rabi season as against 14.27 lakh hectares last year, the data from Agriculture Ministry showed. As per the second advance estimates of Ministry of Agriculture, maize production is expected at 23.28 mln tonnes as against 22.25 mln tonnes as per final estimates for 2012-13.

Mr Choksi informed that India is currently not competitive as Indian maize is being offered at USD 230 /MT FOB Kakinada/Vizag against Ukrainian origin which is being sold around USD 240-245/MT CNF South Korea. In the domestic markets, maize is trading in the range of Rs.1,150 to Rs. 1,250 per quintal at producing centers, much below minimum support price of Rs. 1,310 per quintal.