Unsustainable maize prices in India

India maize prices continue to move up as arrivals dry up. Prices reached a high of Rs.16283/MT at Gulabbagh (NCDEX warehouse) and deliveries are scarce. At the market yards in South India, particularly in Telangana and Andhra Pradesh prices are being quoted between Rs.15700 15900/MT and deliveries are very slow. Materials available is of varying quality and must be mixed. In some of the market yards, the deliveries stopped some 20 days back and in some, like Badepally the arrivals till date have been about 50% of last year. Traders hint at prices going up further, but such high prices are not sustainable for any end users industry and the demand will drop which is going to bring down the prices and arrivals may increase. That too also may not be good as lower prices could spur the demand and cause panic buying.
As the rabi sowing started on a good note especially in Bihar and higher prices will help farmers decide to sow corn, lower rains during Rabi season could be a damper. But the Bihar government has announced a subsidy for the maize growers and money is being earmarked for two irrigations for crops other than wheat (wheat will get money for three irrigations).
Future prices as NCDEX closed in last week of November is lower than last week, primarily of news of better sowing start, Dec down .38% to Rs.15810/MT; Jan down 1.11%t o Rs.16050/MT; Feb down 1.81% to Rs.16290/MT and Mar down 2.48%to Rs.16530/MT. Spot prices were up, Nizamabad up 2.19% to Rs.15718/MT; Davanagere up 1.19% to Rs.15575/MT; Karimnagar up 2.42% to Rs.15533/MT; Sangli up 1.25% to Rs.16200/Mt and Gulabbagh up 3.47% to Rs.16283/MT.
In the US, due to the thanks giving holiday the business was slow and corn on CBOT dropped marginally. Dec down 1.10%to $141.41/MT; Mar down 0.65% to $144.56/MT and May down 0.64% to $146.84/MT. There was change in FOB prices and FIB prices US Gulf were indicated at $173/MT and CNF to SEA region at $215-217/MT’ Prices at PNW were indicated at $183/MT. Prices at other origins too remained the same, Argentina $173/MT; Brazil $173/MT; Black Sea origin $172/MT; France $176/MT. Due to short week trade, no major change was seen in DDGS prices, which were indicated at $188-192/MT and delivered to SEA region in the range of $220-224/MT. Other protein sources, CGM was priced at $607/MT (FOB).
Source: Techproindia