Maize prices likely to ease from August

KOLKATA: Maize prices in India are likely to ease from August onwards as global supply increases making Indian exports unviable due to higher export prices. The prices are also likely to be pressurised by expectations of higher kharif production on normal monsoon forecast by Indian Meteorological Department.

Despite bad monsoon, Indian crop output in 2012-13 marketing year ending August 2013 stood at 218.2 lakh tonnes as per the farm ministry's third advance estimate, as against 217.6 lakh tonnes a year earlier. "Global supply of maize is likely to rise following record crop in Argentina and Brazil; who compete with India for exports to Vietnam, Indonesia and Malaysia. Exports from Argentina and Brazil has already started replacing Indian crop due to higher prices," said Mr. Raju Choksi, vice president (agro-commodities), Anil Nutrients Ltd., a subsidiary of the Rs 650 crore plus agro and food processing major Anil Ltd.

Mr Choksi added that with monsoon rains already covering entire country much ahead of schedule and forecast of normal monsoon, acreage and output in kharif 2013 is also expected to be higher, which would further put pressure on the prices going forward. "By August, enough data would be available to know the progress of sowing of maize. If monsoon progresses as per current schedule, the output is likely to be higher by atleast 5-7%, which would impact the prices in subsequent months," Mr. Choksi said.

However, early monsoon has also impacted the rabi crop in Bihar; thereby affecting the Indian exports. Crop quality in Bihar has worsened due to early rains. This is likely to support the prices in the near term; but improved global supply scenario and expectations of higher kharif output would play their part subsequently.