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| Maize open market prices fall below support price |
| BS Reporter / Mumbai Apr 03, 2009, 00:25 IST |
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Weighed down by demand slump and a projected decline in exports, maize producers are getting prices that are lower than the minimum support price (MSP).
In the open market, maize was trading between Rs 760 and Rs 800 per quintal. The MSP of the crop was raised to Rs 840 from Rs 640 last year.
In Davangere (Karnataka), spot prices were being quoted in the range of Rs 760-775. In Andhra Pradesh, spot prices were ruling at around Rs 770, whereas in Bihar, it was Rs 800.
However, the prices are still higher by 5-10 per cent over the last season’s.
The country’s exports of maize was anticipated to be lower this year as demand from the overseas market has so far been poor. A fall in crude oil prices has resulted in a lower offtake of the commodity. According to experts, lower overseas as well as domestic demand was expected to keep the maize market weak to steady this year.
This year, the total production of the crop was pegged at 17 million tonnes in the country, while last year it was 19 million tonnes.
Last year, the country’s export of maize had almost reached 3 million tonnes — the highest so far — which had pushed the maize market. To keep the prices under check and maintain availability in the domestic market, the government had banned the exports till October, 2008.
In this marketing season, India has exported only 250,000 tonnes of maize. This may go up to 800,000 tonnes in the coming months as India is better placed to export the commodity to South East Asian countries. The landed cost of Indian maize in those countries comes to $195 a tonne.
Vimal Bengani, a Kolkata-based maize exporter, said, “The overseas demand is nominal and it is mainly from nearby countries in Southeast Asia. In the domestic market, prices will slip as demand is not good.”
The starch industry too is not expecting much rise in maize prices this year. Vishal J Majithia, managing director of Mumbai-based Sahyadri Starch, said, “This year, we do not see prices to rise to those high levels of last year.” Last year, maize market had neared Rs 1,000 a quintal mark.
Kunal Mazumdar, a research analyst at Agriwatch Commodities, said, “Rabi crop is good in Andhra Pradesh. We expect the prices to remain weak to steady level. Since there is an arrival pressure, market is expected to behave bearish.” In Nizamabad, the arrival is around 7,000 quintals, he added.
On the National Commodity and Derivatives Exchange, the near month contract of maize closed on Thursday at Rs 829.50 a quintal against the previous close of Rs 827 a quintal.
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